Introduction:
The main business of the Company is the production and
marketing of Denim focused Textile and Apparel products, ranging from raw
cotton to retail ready goods. Azgard
Nine Limited is one of the largest denim products Company by sales in Pakistan. Azgard Nine Limited
("the Company")was incorporated in Pakistan as a public limited
company and is listed on Karachi Stock Exchange (Guarantee) Limited. The
Company is a composite spinning, weaving, dyeing and stitching unit engaged in
the manufacturing of yarn, denim and denim products. The registered office of
the Company is situated at Ismail Aiwan-e-Science, off Shahrah-e-Roomi, Lahore.
The Company has three production units with Unit I located at 2.5 km off Manga,
Raiwind Road, District Kasur, Unit II at Alipur Road, Muzaffargarh and Unit III
at 20 km off Ferozpur Road, 6kmBadian Road on Ruhi Nala, Der Khurd, Lahore.
Capital structure:
The company is highly leveraged. The leverage is
unsustainable with negative equity capital in 2014. Although financial charges are declining,
however, it is unsustainable considering current business environment.
Capital structure and
leverage
|
|||
Year ending june
|
2012
|
2013
|
2014
|
leverage
|
3.075314
|
3.368534
|
4.254345
|
leverage without revaluation reserve
|
5.548871
|
12.63014
|
-22.4879
|
Equity capital
|
4,471,164,231
|
1,262,285,899
|
-748,295,453
|
Total liability
|
24,809,914,809
|
15,942,846,283
|
16,827,600,700
|
Financial charges
|
3,424,378,071
|
2,101,750,204
|
1,529,841,093
|
Revenue and income profile:
The company has stagnant sales stream albeit declining
sales in 2014. Although gross profit is improving, its bottom line is very poor
due to bulky management and administration expenses as well as financial
charges.
Income and revenue
profile
|
|||
Year ending June
|
2012
|
2013
|
2014
|
sales
|
11,524,279,419
|
13,719,625,585
|
13,301,847,243
|
Gross Profit
|
-1,118,047,394
|
461,579,630
|
962,330,849
|
Operating loss
|
-2,536,242,646
|
-1,054,167,199
|
-53,715,181
|
PAT
|
-6,076,575,125
|
963,944,545
|
-2,125,555,933
|
EPS/LPS
|
-13.35
|
2.119
|
-4.673
|
Stock valuation:
This company is at the mercy of donors and can be
consider as junk company. However favorable economic and business environment
can easily make this company sustainable.
2014
|
Book value
|
Book Value Rev Reserve
|
Avg Market Price
|
High price
|
Low price
|
Negative Value
|
8.79
|
6.69
|
10.34
|
4.59
|
Conclusion: High risk investing in ANLtill next report
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