750THE RAMARAJU SURGICAL COTTON MILLS LIMITED UNLISTED SHARE
ABOUT THE RAMARAJU SURGICAL COTTON MILLS LIMITED
THE RAMARAJU SURGICAL COTTON MILLS LIMITED is a part of Ramco Group of Companies. Ramco group is involved in the business of cotton, yarn, cement, roofing, building products and enterprise software solutions.
The Ramaraju Surgical Cotton Mills Limited was established in 1993 and based in Rajapalaiyam, Tamil Nadu. The company has been a major contributor in developing the region from an agrarian to an industrial society.
The company is mainly engaged in manufacturing of surgical dressings, grey fabrics and yarn. The Ramaraju Surgical Cotton Mills Limited is the largest producer of absorbent cotton, bandages, gauze and other wound care products. Moreover, it also generates electricity from solar panels and windmills for its captive consumption.
The weaving division of company accounts for around 50% of the company’s revenue. Company installedadditional 24 rapier looms that has been in production during the second half of FY 2020 to meet thedemand of more complex and tighter weaves.To control sizingcosts, the Company has installed a control unit to maintain uniformity of sizing pick up therebyreducing chemical consumption.The Company has wind mills with installed capacity of 8.30 MW for its captive power consumption. In FY 2020, the Company has installed the 1.20 MW rooftop solar power panels.
The monthly production capacity of the company is over 125 tons of medical grade bleached cotton and 15 Lakh square meters of bandages and gauze products. The company produces around 400 tons of superfine count ring-spun yarn and about 400 tons of open-end yarn per month. As of 31st March 2020, the company comprises of a product portfolio of 200 unique products. The factories of the company are located in Rajapalaiyam, Perumalpati, Subramaniapuram, and Thirumalagiri Village
The equity shares of the Company are listed with Metropolitan StockExchange of India Limited.
INCORPORATION DETAILS
CIN | L17111TN1939PLC002302 |
Registration Date | 28 February 1939 |
Category/Sub-category of the Company | Public Limited Company |
Address of the Registered office and contact details | P.A.C. Ramasamy Raja Salai, Rajapalaiyam - 626 117. Tamil Nadu. |
Name, Address and Contact Details of Registrar and Transfer Agent, if any | Share Transmission and other activities carried out in-house. |
PRINCIPAL BUSINESS ACTIVITES OF THE COMPANY
Name and Description of main products/services | NIC Code of the product/service | % to total turnover of the Company |
Fabrics | 13121 | 49.33 |
Yarn | 13111 | 36.14 |
Surgical Dressings | 21006 | 12.54 |
BOARD OF DIRECTORS
Shri P.R. VENKETRAMA RAJA (Chairman)
Smt. NALINA RAMALAKSHMI (Managing Director)
Shri N.R.K. RAMKUMAR RAJA (Managing Director)
Dr. M. KARUNAKARAN
Shri N.K. SHRIKANTAN RAJA
Shri P.J. ALAGA RAJA
Justice Shri P.P.S. JANARTHANA
Shri V. SANTHANARAMAN
Shri P.J. RAMKUMAR RAJHA
Shri P.A.B. RAJU
PARTICULARS OF ASSOCIATE COMPANIES
Name of the Company | % of shares held |
The Ramco Cements Limited | 1.54% |
Ramco Industries Limited | 0.16% |
Ramco Systems Limited | 0.04% |
Rajapalayam Mills Limited | 1.83% |
Sri Vishnu Shankar Mills Limited | 0.75% |
Shri Harini Media Limited | 2.65% |
Sri Harini Textiles Limited | 49.67% |
THE RAMARAJU SURGICAL COTTON MILLS LIMITEDUNLISTED SHARE DETAILS
Total Available Shares: | 39,46,560 |
Face Value: | Rs. 10 Per Equity Share |
ISIN: | INE328E01027 |
PAN No. | AAACT4308D |
Lot Size: | 50 Shares |
Last Traded Price: | Rs. 625 |
Market Cap: | Rs. 246.66 Crore |
SHAREHOLDING PATTERN
(As on 31-03-2020)
S. No. | Shareholders’ Name | Number of shares | % of total Shares of the company |
1 | Smt. NalinaRamalakshmi (Promoter) | 14,91,860 | 37.80% |
2 | Shri N.R.K. Ramkumar Raja (Promoter) | 1,74,260 | 4.41% |
3 | Other Promoters | 34,160 | 0.87% |
4 | Public Shareholding | 22,46,280 | 56.92% |
| Total | 39,46,560 | 100.00% |
INDUSTRY OUTLOOK
Market conditions are challenging for the spinning mills across the entire globe. With excess capacityand lower demand, FY 2020 has been a difficult year. With thedecrease in yarn demand, the industry did not see any equivalent decrease incotton prices primarily due to the minimumsupport price (MSP) implemented bythe government owned Cotton Corporation of India (CCI).In addition, CottonCorporation of India’s purchase of cotton early in the picking season captured thehigh-quality yarnforcing the industry to pay higher than market to procure qualitycotton duringthe remainder ofthe year. Open-end (OE) yarn sales have been veryadverselyaffected during FY 2020 with theslowdown of demand from China havingbeenaffected by the US-China trade dispute. The industry expects strongheadwinds for near future.
For surgical division, the impact of COVID 19 was seen in the first half of FinancialYear 2020-21 as hospitals had slowed their outpatient and elective procedures tokeep capacity open for COVID outbreakpatients. Extended lock downs have alsohad an impact on retail channel. As a result, theconsumption of surgical productswere under pressure for the first half of FY 2021.
FY 2021 had started off on an unprecedented note with complete lockdown andbusiness restrictions due to Covid - 19 pandemic. The Government had providedlarger economicrelief packages in order to ensure sufficient liquidity as ameasureto support economy. The industry has seen lower demand and production output.
The Surgical Division of THE RAMARAJU SURGICAL COTTON MILLS LIMITED wasable to operate from the endof the first week of April. However, demand fromhospitals was weak. The company anticipate the demand to reach normal levels inthe second quarter of FY 2021. TheSpinning Division was able to commence partialoperations from the second week of May 2020andreached higher productionlevels in late June 2020. The worldwide demand for fineyarns is facing strongheadwinds due the sluggish consumer demand from the premiumsegment. Thegovernment has also been aggressive in purchasing cotton in open market tosupport farmers thereby holding raw material prices at an artificiallevel.It isexpected that the textile industry’s performance will recover to preCovid levels inFY 2022 on account of boost in demands from domestic as well as export markets.Rating agency ICRA has assigned ‘Stable’ outlook for FY 2022.
KEY FINANCIALS OF THE RAMARAJU SURGICAL COTTON MILLS LIMITED (In Rs. Lakhs)
Particulars | 2020 | 2019 | 2018 | 2017 |
Revenue from Operations | 29,589.45 | 25,268.60 | 26,141.73 | 24,119.76 |
EBITDA | 3,227.07 | 2,752.18 | 3,143.59 | 3,584.71 |
EBITDA margin | 10.91% | 10.89% | 12.03% | 14.86% |
Finance Cost | 2,774.42 | 2,655.45 | 2,168.43 | 1,725.42 |
Depreciation | 1,657.31 | 1,529.18 | 1,704.96 | 1,434.31 |
Finance Income | 168.84 | 126.17 | 142.79 | 299.41 |
Other Income | 1,831.82 | 104.96 | 80.34 | 12.26 |
Profit Before Tax and Share in profit from associates | 796.00 | -1,201.32 | -506.67 | 736.65 |
Share in Profit/(Loss) of associates | 943.96 | 985.01 | 1,133.96 | 1,245.43 |
Total Tax | -248.34 | -190.23 | -258.83 | 320.49 |
Profit After Tax (PAT) | 1,988.30 | -26.08 | 886.12 | 1,661.59 |
PAT margin | 6.29% | -0.10% | 3.36% | 6.80% |
EPS | 50.26 | -0.66 | 22.46 | 84.22 |
BALANCE SHEET OF THE RAMARAJU SURGICAL COTTON MILLS LIMITED (In Rs. Lakhs)
Particulars | 2020 | 2019 |
ASSETS | ||
NON CURRENT ASSETS | ||
Tangible assets | 24,078.02 | 23,878.77 |
Intangible assets | 6.11 | 6.81 |
Investments in Associates | 17,231.66 | 16,501.55 |
Financial assets | 562.24 | 448.76 |
Other non current assets | 90.31 | 274.43 |
Assets held for Sale | 0 | 388.83 |
TOTAL NON CURRENT ASSETS | 41,968.34 | 41,499.15 |
CURRENT ASSETS | ||
Inventories | 8,315.54 | 8,217.88 |
Financial assets | 117 | 139.33 |
Trade receivables | 5,577.25 | 3,753.41 |
Cash and Cash equivalents | 175.2 | 150.66 |
Other current assets | 1,100.60 | 745.31 |
TOTAL CURRENT ASSETS | 15,285.59 | 13,006.59 |
TOTAL ASSETS | 57,253.93 | 54,505.74 |
EQUITY AND LIABILITIES | ||
EQUITY | ||
Equity share capital | 394.65 | 394.65 |
Other equity | 23,257.48 | 21,339.00 |
TOTAL EQUITY | 23,652.13 | 21,733.65 |
LIABILITIES | ||
NON CURRENT LIABILITIES | ||
Borrowings | 10,897.48 | 13,787.58 |
Lease liabilities | 61.07 | 0 |
Provisions | 137.69 | 154.38 |
Tax liabilities | 670.98 | 1,039.66 |
Deferred Government Grant | 43.39 | 46.72 |
TOTAL NON CURRENT LIABILITIES | 11,810.61 | 15,028.34 |
CURRENT LIABILITIES | ||
Borrowings | 15,914.86 | 12,122.61 |
Trade payables | 1,423.74 | 1,173.47 |
Other Financial Liabilities | 4,069.45 | 4,058.63 |
Provisions | 187.2 | 299.85 |
Liabilities for Current Tax | 195.94 | 89.19 |
TOTAL CURRENT LIABILITIES | 21,791.19 | 17,743.75 |
TOTAL LIABILITIES | 33,601.80 | 32,772.09 |
TOTAL EQUITY AND LIABILITIES | 57,253.93 | 54,505.74 |
DIVIDEND HISTORY
Particulars | 2020 | 2019 | 2018 |
Dividend (final + interim) (In Rs.) | 0.50 | Nil | 0.50 |
Retained Earnings (Consolidated) (In Rs. Lakhs) | 5,391.55 | 3,474.65 | 2,690.81 |
PERFORMANCE OF THE COMPANY
On the export front during FY 2020, the Company has made export of Cotton Yarn and GreyFabrics (including merchant exports) for a value of Rs. 6,849 lakhs asagainst Rs. 6,149 Lakhs of FY 2019.
During FY 2020, the Company was able to consume power through own windmillsand rooftop solar plant. However, lower power generation from windmills forced the company tosource power from other sources at higher cost. The overall power cost has decreased during the FY 2020 to Rs. 2,708.04 Lakhs as compared to Rs. 2,915.71 Lakhs incurred during FY 2019. The reduction in power cost is partly due to installation of 1.2 MW solar powerpanels.
The Company hasinvested about Rs. 1,342.06 Lakhs in Fabrics Division expansion and Rs. 347.01 Lakhs in SpinningDivision modernization.
During FY 2020, the Company has completed the sale of all the assets of Silvassa Unit.
The wind farm has generated 132.09 Lakhs Kwh in FY 2020 as compared to 144.22 Lakhs Kwh of the FY 2019. The Solar Power Panels hasgenerated 6,49,695 Units from October 2019 to March 2020.
Total Revenue from Operations of the company increased by 17.10% from Rs. 25,268.60 Lakhs in FY 2019 to Rs. 29,589.45 Lakhs in FY 2020.
EBITDA of the company increased by 17.26% from Rs. 2,752.18 Lakhs in FY 2019 to Rs. 3,227.07 Lakhs in FY 2020.
The consolidated net profit after tax of the company amounted to Rs. 1,988.30 Lakhs for FY 2020 as against the Net Loss after tax of Rs. 26.08 Lakhsfor FY 2019.
Current ratio of the company as on 31st March 2020 was 0.84. And Debt to equity ratio of the company as on 31st March 2020 was 3.97.
Total book value of The Ramaraju Surgical Cotton Mills Limited as on 31st March 2020 was Rs. 23,652.13 Lakhs, which translates to book value of Rs. 600 per equity share.
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