BgSE FINANCIALS LIMITED

(A Subsidiary of Bangalore Stock Exchange Ltd)

51, Stock Exchange Towers, 1st Cross, J. C. Road
Bangalore - 560 027. Phone : 41575234 / 35, 41575203
Fax : 41575232 visit us at : www.bfsl.co.in

Research Report
on
SEL MANUFACTURING COMPANY LTD
Price as on 18-02-2010 : Rs. 88.85/-

Release Date : 25-02-2010

COMPANY PROFILE
YEAR OF INCORPORATION : The Company was initially constituted vide a partnership deed dated May 14, 2001.
incorporated under the name Saluja Exim Ltd as a public The Firm has engaged in the business of manufacture of
limited company on May 8, 2000. It is a part of the value added knitted garments having production
R S Saluja Group of Companies set up by Mr. Ram Saran facilities located in the tax free zonein Baddi in Himachal
Saluja. The R S Saluja Group has been in existence for Pradesh.Saluja Processors Private Limited (SPPL) and
more than 35 years, having facilities for manufacture of Saluja Fabrics Limited (SFL) both forming part of the
yarns, fabrics, garments. In the year 2003, the company R S Saluja Group were merged with Company w.e.f April
name was changed to SEL Manufacturing Company Ltd. 1, 2004. Both SPPL and SFL were involved in the business of
The company has vertically integrated multi-product spinning, knitting, dyeing & manufacturing of polyester
textile company, manufacturing and exporting cotton textured yarn, and manufacture and exports of
yarn, knitted fabrics and knitted garments. The company readymade garments.
is production facilities located in Ludhiana in Punjab and June 2006, the Company has acquired the 100% EOU
Baddi in Himachal Pradesh. To cater to target exports Spinning Unit of Saluja Cotex Private Limited SCPL). SCPL
markets, the company has opened representative forms part of the R S Saluja Group of companies and is
offices in Russia and Dubai. Presently, majority of engaged in the business of textile. In 2007, the company
garments is exported to Russia and U.A.E. The company has acquired land & building along with 150 garmenting
has operating with a consolidated capacity to machines ('assets') of a garmenting unit of Utkarsh
manufacture 6 million garment pieces per annum and Apparels situated in Ludhiana.
capacities in cotton yarn, fabric knitting, and fabric SUBSIDIARY COMPANIES :
processing & dyeing are at approximately 49,056 ¿ M/s SE Exports
spindles (11,088 tons yarns per annum), 4,050 tons per ¿ M/s Kudu Industries
annum of fabric knitting per annum and 3,000 tons per ¿ SEL Textiles Pvt Ltd.,
annum of fabric processing & dyeing respectively.
OVERVIEW & SERVICES AT A GLANCE : The company
manufactures, exports of all types of knitted garments.
Latest Quarter Results-December 2009/2008
They are into house spinning, knitting, dyeing, Finishing Quarter Ended Quarter Ended Quarter Ended
Particulars (Dec 09) (Dec 08) (% Var)
and Garmenting to meet the demand of price conscious
and quality conscious market. It do all types of knitted Sales 222.99 138.32 61.2
products. The basic Products include T-shirts, Polo shirt, Other Income 8.09 3.87 109
Sweat shirt, Boxer shorts, Girls top etc. It can provide bulk PBIDT 47.1 26.12 80.3
quantities. The capacity is 30-35 thousand garments Interest 11.48 11.56 -0.7
daily.
PBDT 35.62 14.56 144.6
HISTORY BACKGROUND
The Company was admitted as a 99% partner in M/s S E Depreciation 7.8 4.27 82.7
Exports ('Firm') from April 1, 2005, with two Promoters viz. PBT 27.82 10.29 170.4
Mr. Dhiraj Saluja and Mrs. Reema Saluja, as the other two Tax 7.15 3.94 81.5
partners with 0.5% stake each vide partnership deed Deferred Tax 0 0 -
dated April 1, 2005. M/s S E Exports is a partnership firm PAT 20.67 6.35 225.5

¿
This report is meant for private circulation only.
¿
The views expressed in this report are that of experts and not of BgSE Financials Ltd.
 Research Report
INDUSTRY PROFILE
INDUSTRY STRUCTURE & DEVELOPMENT :
India Textile Industry is one of the leading textile industries in the world. Though was predominantly
unorganized industry even a few years back, but the scenario started changing after the economic
liberalization of Indian economy in 1991. The opening up of economy gave the much-needed thrust to
the Indian textile industry, which has now successfully become one of the largest in the world.
India textile industry largely depends upon the textile manufacturing and export. It also plays a major
role in the economy of the country. India earns about 27% of its total foreign exchange through textile
exports. Further, the textile industry of India also contributes nearly 14% of the total industrial production
of the country. It also contributes around 3% to the GDP of the country.
India textile industry is also the largest in the country in terms of employment generation. It not only
generates jobs in its own industry, but also opens up scopes for the other ancillary sectors. India textile
industry currently generates employment to more than 35 million people. It is also estimated that, the
industry will generate 12 million new jobs by the year 2010.
INDUSTRY OUTLOOK:
About 60% of Indian exports of textiles and over 70% of clothing are to USA and EU 27 markets. The
domestic players are oflate focused on enriching and broadening their product mix and are also
exploring new markets, while maintaining and increasing Indian textiles and clothing (T&C) share in
core markets through product innovation and diversification. The global and domestic Textiles sector
appears to have bottomed out after couple of years of struggle. The recovery in global demand and
accelerated growth in domestic demand is facilitating re-rating of the Indian textile sector in general
and yarn producers in particular.

HIGHLIGHTS
¿
The company is operating with a consolidated capacity to manufacture 4.5 million garment pieces
per annum. Its capacities in cotton and combed yarn and fabric knitting are at approximately 29,856
spindles (6,516 tons yarns per annum) and 1,950 tons of fabric knitting per annum respectively.
¿
The company has achieved Gross Sales to the tune of Rs. 58994.69 lacs in 2008-09 as compared to Rs.
35738.70 lacs in the 2007-08. The profit before tax stood at Rs. 6813.66 lacs as compared to Rs.5525.56
lacs during the previous year.
¿
Net profit of SEL Manufacturing Company declined 4.75% to Rs 18.23 crore in the quarter ended June 2009
as against Rs 19.14 crore during the previous quarter ended June 2008. Sales rose 3.42% to Rs 182.92 crore
in the quarter ended June 2009 as against Rs 176.87 crore during the previous quarter ended June 2008.
¿
Sel Manufacturing Company Limited has acquired a majority stake in SEL Textiles Pvt. Ltd., thereby making
it a subsidiary.
¿
SEL Manufacturing Company Ltd is setting up a Technical Textile Park in the State of Himachal Pradesh for
which concerned SPV has applied for the approvals from the Ministry of Textiles of Government of India for
sanctioning the Project under the Scheme for Integrated Textile Park (SITP).
¿
In 2006 it acquired 100% EOU spinning unit of Saluja Cotex Private Limited. It also acquired assets &
property of Mangla Cotex Limited through bidding process from official liquidator vide order dated March
23, 2006 passed by the Hon'ble High Court of Punjab & Haryana at Chandigarh.
¿
The Company has also set up a Terry Towel Plant with capacity of 10 TPD of Terry Towel, which
commenced production in this (2008-09) financial year.
¿
The company holds 99% stake each in the partnership firm(s) namely M/s SE Exports and M/s Kudu
Industries. M/s SE Exports, the firm is engaged in the business of manufacture of value added knitted
garments having production facilities located in the tax free zone in Baddi in Himachal Pradesh.
¿
SEL Manufacturing Company has approved in December 2009 , the allotment of 5,600,000 global
depositary receipts (GDRs) representing 5,600,000 equity shares, par value of Rs 10 each at an issue price
of $1.52 per GDR to the persons resident outside India.

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 Research Report

FINANCIALS OF SEL MANUFACTURING COMPANY LTD

Trailing 4th Quarter Results-December 2009 / 2008
Amount in Crores
Particulars 2009 2008 %Change
Net Sales 833.58 551.82 51.1
Other Income 53.00 40.15 32.0
Total Income 886.58 591.97 49.8
Expenditure 717.46 478.33 50.0
Operating Profit 169.12 113.64 48.8
Depreciation 27.08 13.67 98.1
Tax 16.90 19.43 -13.0
Fringe Benefit Tax 0.00 0.13 0.00
Interest 45.70 31.21 46.4
Net Profit/Loss 79.44 49.20 61.5
Reserves (March) 298.26 199.22 0.49
Equity (March) 17.17 15.22 .13
Earnings Per Share (EPS) Latest 26.17 -
Cash Earning Per Share (CEPS) 31.16 - -
Face Value (Rs.) 10 10 -
PE Ratio Latest 3.43 - -
PC Ratio Latest 2.79 - -
Price as on 17/02/2010 89.10 -
Dividend% & Yield in 2009 15 & 1.01 - -
Dividend% & Yield in 2008 15 & 0.51 - -

PERFORMANCE AT A GLANCE : SEL MANUFACTURING COMPANY LTD

Capital Book
Net Sales Networth OPM NP CP EPS ROCE RONW Dividend
YEARS (Rs .Cr) (Rs.Cr) Employed Value
(Rs .Cr) (Rs.Cr) (Rs.Cr) (Rs) (%) (%) (%)
(Rs.Cr) (Rs.Cr)
200503 62.66 92..53 5.86 3.33 4.38 126.36 166.5 4626.5 18.11 20.24 0
200603 119.13 108.83 24.06 14.64 17.42 151.82 14.91 110.82 15.3 14.54 0
200703 185.58 132.53 40.87 23.6 28.64 269.47 24.03 134.96 17.03 19.56 0
200803 357.39 223.59 78.44 44.85 53.95 549.42 29.3 142.77 16.95 25.19 10
200903 589.95 326.2 123.37 54.78 72.27 949.91 31.9 183.84 14.13 19.93 0
CAGR 56.59 28.66 83.93 75.08 75.18 49.70 - - - - -

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 Research Report
MARKET DATA SHARE HOLDING PATTERN OF
Industry TEXTILES-Spinning/cotton/ SEL MANUFACTURING
blended yarn-ring spg
COMPANY LTD
Market Cap (as on 18/02/2010) 271.72
52 week high/low 110.10/38.10
Foreign
Custodians(Agai
T. T. Q.BSE/NSE (as on 18/02/2010) 43375/ 83375 0%
nst Depository
Receipts)
BSE code & Group 532886/B Indian
23%
NSE code SELMCL 37%

Reuters Code SELM.BO

Bloomberg Code SELMIN
Non
Face Value 10
Non Promoter
Free traded (No of Shares) 15617956 Promoter (Non- (Institution)
Institution) 1%
Listing Mumbai-, NSE 39%

Capital Employed in Mar.2009 & 2008 949.91 & 549.42

Current Ratio in Mar.2009 &2008 1.90 & 2.10
Debt Equity Ratio in Mar.2009 &2008 1.78 & 1.38
Inventory Turnover Ratio in Mar.2009 &2008 6.23 & 5.79
PBIDTM (%) Ratio in Mar.2009 &2008 21.30 & 19.76
APATM(%)Ratio in Mar.2009 &2008 9.53 & 10.88
Net worth in Mar.2009 & 2008 326.2 & 223.59
Latest Book Value (Rs) 130.48
Beta 0.63
ISIN Code INE105101012

TOP TEN SCRIP RECOMMENDED BY RESEARCH COMMITTEE

FROM DEC. 2008 Vs. BSE.500 COMPARISON:
HIGH
HIGH BSE.500
RANK. RECOM RECOM AFTER GAIN/
COMPANY NAME BSE 500 AFTER BSE. 500 %
NO DATE PRICE RECOM LOSS (%)
RECOM Changes
DATE
1 ESSEL PROPACK LTD 2-Dec-08 10 3190 19-Jan-10 58.5 6982 119 485

2 GUJRAT NRE COKE 6-Apr-09 20 3810 6-Jan-10 97.9 6994 84 390

3 JINDAL STEEL & POWER LTD 9-Mar-09 163 2983 21-Oct-09 778 6621 122 377

4 PANTALOON
RETAIL (INDIA) LTD 5-Mar-09 116 3012 21-Jan-10 455 6803 126 292

5 HINDALCO INDUSTRIES 24-Nov-08 48 3259 5-Jan-10 179.75 6974 114 274

6 TATA MOTORS 16-Apr-09 230 4000 5-Jan-10 842 6974 74 266

7 KOTAK MAHINDRA
BANK LTD 2-Feb-09 275 3319 20-Jan-10 878 6973 110 219

8 STATE TRADING
CORPORATION OF INDIA LTD 21-Apr-09 185 4030 19-Jan-10 561.7 6982 73 204

9 ALLAHABAD BANK 27-Jan-09 49 3293 19-Jan-10 144.9 6982 112 196

10 STERLITE INDUSTRIES
(INDIA) LTD 23-Mar-09 320 3402 6-Jan-10 928 6994 106 190

STATEMENT OF CAUTION: INVESTORS ARE ADVISED TO EXERCISE CAUTION AND INVEST IN PHASED MANNER.
4
 Research Report

FULL YEAR: CONSOLIDATED RESULTS : SEL MANUFACTURING COMPANY LTD

(Curr.Rs in Cr)
Full Year 200903 Full Year 200803 VAR [%] Full Year
Gross Sales 589.95 357.31 65.1
Excise Duty 0 0 0
Net Sales 589.95 357.31 65.1
Other Operating Income 0 0 0
Other Income 41.71 35.33 18.1
Total Income 631.66 392.64 60.9
Total Expenditure 508.27 314.19 61.8
PBIDT 123.39 78.45 57.3
Interest 37.77 14.1 167.9
PBDT 85.62 64.35 33.1
Depreciation 17.49 9.1 92.2
Tax 13.35 10.4 28.4
Fringe Benefit Tax 0 0 0
Deferred Tax 0 0 0
Reported Profit After Tax 54.78 44.85 22.1
Extra-ordinary Items 0 0 0
Adjusted Profit After
Extra-ordinary item 54.78 44.85 22.1
EPS (Unit Curr.) 32.69 33.21 -1.6
EPS (Adj) (Unit Curr.) 32.69 33.21 -1.6
Book Value (Unit Curr.) 0 0 0
Dividend (%) 0 10
Equity 17.17 15.22 12.8
Reserve & Surplus 298.49 202.08 47.7
Face Value 10 10
Public Shareholding (No Of.Shares) 6996032 5402110
Public Shareholding (% in Equity) 41 36
Pledged/Encumbered - No. of Shares 0 0
Pledged/Encumbered - %
in Total Promoters Holding 0 0
Pledged/Encumbered - %
in Total Equity 0 0
Non Encumbered - No. of Shares 10169968 0
Non Encumbered - %
in Total Promoters Holding 100 0
Non Encumbered - %
in Total Equity 59.24 0
PBIDTM(%) 20.92 21.96
PBDTM(%) 14.51 18.01
PATM(%) 9.29 12.55

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 Research Report

TECHNICAL ANALYSIS
SEL MANUFACTURING LTD:-
SEL Manufacturing co ltd share price after hitting a high of Rs 757 in Aug 08 had a step fall to Rs 38 in March 09,
since then made a high of Rs 110 after that is in a consolidation mode. Long term trend (200 DMA) & Medium
term trend (50 DMA) both are near Rs 86. Support is at Rs 75. First target Rs 110 if it breaks this next Rs 196, both
averages are presently sideway moving.

Readers Please note that, hourly chart of

Nifty will be covered in place of daily Nifty chart with comments.
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 Research Report
TECHNICAL ANALYSIS

NIFTY:-
Nifty opened the week at 4827 points & traded during the week between 4783 - 4929 before closing the week
at 4844 with a small net gain of 17 points, Nifty variation during the week is 146 points i.e. 3.05%. Nifty stayed
below first resistance 4941 & above first support 4685.

Index Nifty
Nifty Open 4827
Traded between 4783 to 4929
Variation 146 points i.e. 3.05 %
Nifty support First is 4550 points next will be 4685
Resistance 4941 points

RECOMMENDATION:
Buy Bank of Baroda around 580.00 with a Stop Loss at close below 545 for a target of 655 - 755.

Readers Please note that, hourly chart of

Nifty will be covered in place of daily Nifty chart with comments.
7
 LIST OF INVESTORS SERVICE CENTRES (ISC) :
1. CHENNAI : No. 3, G, 3rd Floor, Mandira Apartment, Raman Street, North Boag Road, T Nagar,
CHENNAI - 600 017. Tel. : (044) 39148836 / 35, email : isc_chennai@bfsl.co.in
2. HYDERABAD : Shop No-8,Ground Floor, "Meridian Plaza” No-6-3-853/1,Ameerpet, HYDERABAD - 500016.
Tel. : (040) 30726216, email : isc_hyderabad@bfsl.co.in
3. ARSIKERE : RS No. 2780, KJ Diamond Shopping Complex, Shanbogh Street, ARSIKERE - 573 103.
Tel. : (08174) 233283, email : isc_arsikere@bfsl.co.in
4. BELGAUM : No:11,2nd Floor, Bilgi Complex, Opp Adarsha Palace, College Road, BELGAUM - 590001.
Tel. : (0831) 4205483, email : isc_belgaum@bfsl.co.in
5. CHITRADURGA : DCRM Complex, State Bank of India, APMC Road, CHITRADURGA - 577501. Tel. : (08194) 220660,
email : isc_chitradurga@bfsl.co.in
6. DAVANAGERE : No. 66, 2A / 2B, 5th Cross, P.J. Extension, DAVANAGERE - 577 002. Tel. : (08192) 234060 / 234061,
email : isc_davangere@bfsl.co.in
7. DHARWAD : G-13, Shree Banashankari Avenue, Opp NTTF Ramnagar, P.B. Road, DHARWAD - 580 001.
Tel. : (0836) 2444011, email : isc_dharwad@bfsl.co.in
8. HASSAN : 1st Floor, Shantha Sundar Complex, Near Hotel Palika, R.C. Road, HASSAN - 573 201.
Tel. : (08172) 232223, email : isc_hassan@bfsl.co.in
9. HUBLI : Dr. Odugouders Building, Ground Floor, Behind HDFC Bank Club Road, HUBLI - 580 020.
Tel. : (0836) 225095, email : isc_hubli@bfsl.co.in
10. MADIKERI : Ist Floor Gangothri Complex, College Road, MADIKERI - 571 201. Tel. : (08272) 228445 ,
email : isc_madikeri@bfsl.co.in
11. MANGALORE : Essel Chambers, Second Floor, No. 136,137/2, Karangalpady, MANGALORE - 575 003.
Tel. : (0824) 2497170 / 2497180, email : isc_mangalore@bfsl.co.in
12. MANDYA : No. 1117, First floor, M.V.G. Complex, M.C. Road, MANDYA - 571 401.
Tel. : (08232) 402925, email : isc_mandya@bfsl.co.in
13. Mysore : No.1226/A, 3rd Main Road, Krishnamurthy puram, MYSORE - 570 004 Tel : (0821) 2330525 / 2446702
Fax : (0821) 2442702, 2330525, email : isc_mysore@bfsl.co.in
14. PUTTUR : First floor, Lotus Mansion, near Christopher Complex, APMC Road, PUTTUR - 574 201
Tel. : (08251) 232565, email : isc_puttur@bfsl.co.in
15. RANEBENNUR : No. 886, Kathare Building, Opp. Gupta Petrol Bunk, PB Road, RANEBENNUR - 581115.
Tel. : (08373) 263350 / 263351, email : isc_ranebennur@bfsl.co.in
16. SHIMOGA : 1791, 2nd Parallel Road, Durgigudi, SHIMOGA - 577 201. Tel. : (08182) 277701,
email : isc_shimoga@bfsl.co.in
17. TUMKUR : “Sri Krishna” 1st Floor, BNP Compound, M.G. Road, TUMKUR - 572 101.
Tel. : (0816) 2254159 / 2254195, email : isc_tumkur@bfsl.co.in

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