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Saturday, August 13, 2016


Scrip Code: 535467 AIFL
CMP:  Rs. 301.55; Market Cap: Rs. 587.03 Cr; 
52 Week High/Low: Rs. 327.00 / Rs. 215.65
Total Shares: 1,94,67,240 shares; Promoters : 1,31,86,640 shares – 67.74 %; Total Public holding : 62,80,600 shares – 32.26 %; Book Value: Rs. 31.63; Face Value: Rs. 10.00; EPS: Rs. 6.36; Dividend: 10.00 %; P/E: 47.41 times; Ind. P/E: 33.88; EV/EBITDA: 23.42 times cash 76Cr
Total Debt: Rs. 59.21 Cr; Enterprise Value: Rs. 643.37 Cr.

ASHAPURA INTIMATES FASHION LIMITED: The Company was founded on July 17, 2006 and is headquartered in Mumbai, India. It was incorporated as Ashapura Apparels Private Ltd and changed its name to Ashapura Intimates Fashion Ltd in 2012. Ashapura Intimates Fashion Ltd is engaged in the business of designing, branding, marketing and retailing intimate garments such as loungewear, bridal night wear, honeymoon sets, bathrobes and night wear. Ashapura Intimates sell their products such as loungewear, bridal night wear, honeymoon sets and bathrobes under the brands Valentine and N-Line. Also night wear, maternity feeding night wear and bridal night wear (two pieces) are marketed under the brand Night & Day and sportswear, women’s innerwear and lingerie’s under the brands Valentine Sportswear, Valentine Secret Skin & Valentine Pink. Company has in house design studio for developing products and creating styles to remain updated on consumer tastes and fashion trends. The company came out with an IPO on BSE SME exchange on March 28, 2013 offering 52,50,000 equity shares of Rs. 10 each for Rs. 40 per share in shares lot of 3000 shares per lot, raising Rs. 21 Cr. The shares of the company got listed on BSE SME on April 15, 2013 making a high of Rs. 48 on listing day and got migrated to BSE Main Board in June 03, 2015 and got listed on NSE from December 02, 2015. The object of offer for sale was to set up 10 Exclusive Brand Outlet (EBO’s) to fund branding and marketing set-up, to make an investment in the equity shares of Group Company, to fund the modernization of machineries, to meet the incremental working capital requirements, to meet Issue expenses and for other general corporate purposes. Ashapura Intimates Fashion Ltd has till date not declared any Split in its face value of shares and not declared any bonus shares. Momai Appearls Ltd is a listed subsidiary of AIFL; Momai was incorporated in 2010 and is engaged in manufacturing of Intimate garments. Momai Appearls Ltd came with an IPO in 2014 offering 38,46,400 equity shares of Rs. 10 at Rs. 78 per share raising Rs. 30 Cr, it got listed on NSE SME on October 16, 2014 at Rs. 78 made a high of Rs. 82.00, Momai have not declared any split in face value of its share and not declared any bonus shares. Ashapura Intimates Fashion Ltd exports its products in Middle East, Africa, Canada. ASHAPURA INTIMATES FASHION LTD is locally compared with Women’s Next Loungeries Ltd, Lovable Lingerie Ltd, Page Industries, Maxwell Industries, Cantabil Retail India Ltd, Future Lifestyle Fashion Ltd, Provogue (India) Ltd, Lux Industries Ltd, Riba Textiles Ltd, Arrow Textiles Ltd, Momai Apparels Limited and Globally with L Brands Inc of USA, GAP INC of USA, GUESS? INC of USA, Cato Cororation of USA, ANN INC of USA, New York & Company Inc of USA, Christopher & Banks Corporation of USA, Ascena Retail Group Inc of USA, Chico’s FAS Inc of USA, Frederick’s of Hollywood Group Inc of USA, Cache Inc of USA, Caely Holdings Bhd of Malaysia, Teo Guan Lee Corporation Bhd of Malaysia, Asia Brands Berhad of Malaysia, Voir Holdings Berhad of Malaysia, Kimuratan Corporation of Japan, Atsugi Company Ltd of Japan, Shanghai Lanshitian Model Desig Co. Ltd of China, Polywell Textile & Garments CO Ltd of China, Meimei Fashion Garments Hong Kong, Hanes Plc of Europe, Vinatex Danang JSC of Vietnam, PhuThinh NhaBe Garment JSC of Vietnam, Season Pacific Holding Ltd of Cayman Islands, Takson Holdings of HongKong,  Wonpung Mulsan Co Ltd of South Korea.

Investment Rationale:
Incorporated in 2006, Ashapura Intimates Fashion Limited (AIFL) is in the business of designing, trading, job contract manufacturing, branding, and marketing and selling of intimate garments such as loungewear, bridal night wear-honeymoon sets, bathrobes and nighties since incorporation. The company expanded its product portfolio by adding other intimate garments such as sportswear, women's innerwear including lingerie. It now plans to foray into a new product category i.e. kids' innerwear having cartoon characters. AIFL's products are under the brands "Valentine" and "N-Line" and are available through large network of distributors across India as well as other countries. Its products such as nighties, maternity feeding nighties and bridal night wear (two pieces) are marketed under the brand called "Night & Day". Further in the year of 2011, the company  started marketing of sportswear, women's innerwear and lingerie's under the brands "Valentine Sportswear", "Valentine Secret Skin" & "Valentine Pink" respectively by leveraging its existing marketing network. The Indian Textile and Apparel (T&A) industry has emerged from the economic slowdown and is regaining momentum. T&A, being an important industry, contributes around 5.4 % of India’s GDP. The total T&A industry was worth US$ 9,500 Cr or Rs. 5,21,000 crores in 2013 and is estimated to grow at a promising Compound Annual Growth Rate (CAGR) of 9 % in the coming 10 years. This includes both the domestic market and exports. The value of the domestic T&A market is US$ 5,900 Cr or Rs. 37,51,000 crores which exceeds the value of the exports market, reflecting higher domestic demand and consumption. The apparel sector comprises 70 % of the total domestic market, which in turn becomes the result of an increase in the per capita consumption by Indian consumers. The Indian innerwear market is estimated to grow at a CAGR of 13 % to reach Rs. 59,540 Cr over the period of 2013-23 and women innerwear market is estimated to grow at a CAGR of 15 % to Rs. 44,000 crores over the same period. The women’s innerwear market is driven by value-added innerwear products and contributes around 60 % to the market. The women’s innerwear market is worth Rs. 10,880 crores, and is growing at a promising CAGR of 15 %. The growing number of working women and the increased share of western wear in their wardrobe have propelled this growth. Further, with the increase in exposure, there is an increased demand for better fits and quality alongside the demand for a wider range of colours, styles and accessories. Western wear usually encompasses specialized innerwear, which the branded players can provide for the most part. Brand consciousness is no more restricted to external apparel. Among women’s innerwear brands, strong single brands emerge for bottoms and heritage innerwear brands are preferred for bras. Women are increasingly getting conscious about the brands and styles of their intimate wear. In fact, this changing preference is no longer restricted to just the metros, but has spread to mini metros, tier -I, -II and -III cities. This openness to indulge in branded lingerie has led to a growth in the number of international and domestic innerwear brands present in India. The men’s innerwear market is pegged at Rs. 6,870 crores and is growing at 9 %. Even in this segment various domestic and international brands can be found. Various apparel brands and retailers have extended their product portfolios to men’s innerwear segment to leverage its growth. Apparel players predominantly focusing on active wear, casual wear and even formal wear have launched dedicated sub-brands in men’s innerwear. Consumers mostly purchase branded vests and briefs or boxers, which are the largest category with offerings from most leading innerwear brands. In the men’s wear and women’s innerwear segment, the Company has made its presence felt. The growing demand and spending capacity of consumers has leaded them to spend on these products without thinking of the pocket pinch. It is no longer treated as merely an undergarment but is worn as a fashionable part of clothing that can be flaunted. The company has planned to launch new branch for men's lounge wear category. Innerwear has moved out of the basic necessity bracket and is now associated with a feel good factor. Indian consumers have come out of the shyness cocoon and are willing to experiment with new varieties, styles, colours and brands. This growth in demand has carved out a potential market for innerwear in India. Ashapura Intimates Fashions Ltd has dedicated design studio and develops product taking into consideration the demographic, traditional and geographical aspects. The products are sourced from selected vendors with stringent quality control measures. Products sold to customers goes through the centralized warehousing facility in Thane. The company is focusing on brand promotion through various hoardings, event sponsorships, special event advertisements and advertising in selected print media. It has pan-India presence with a network of 130 distributors and 15 carrying and forwarding agents catering 15,000 point of sales. Company sales its products through various online shopping portals as well as through its own website, viz The company also has a vertically integrated manufacturing facility admeasuring 2,25,000 sqft with a capex of Rs. 27 Cr in Gujarat, this is one of the biggest capacity in production and warehousing in Lounge wear segment in India. Currently, loungewear, bridal night wear, honeymoon sets and bathrobes are marketed under the brands "Valentine" and "N-Line" while nighy, maternity feeding nighties and bridal night wear are marketed under the brand "Night & Day". Ashapura forayed into marketing of sportswear, women's innerwear and lingerie's under the brands "Valentine Sportswear", "Valentine Secret Skin" & "Valentine Pink" in 2011. The company is creating “Valentine” as family intimate ware brand. The growing demand and increase in spending capacity of consumers has leaded to strong growth in this sector also, shifting demographics, shrinking households, a greater number of educated consumers, and the growing number of working women, their ability to adopt changing fashion trends, rising disposable incomes, awareness levels, new retail formats, technological innovations and changing consumer behavior are the trends fuelling the growth of the domestic market.

Outlook and Valuation: 
Ashapura Intimates Fashion Limited (AIFL) was incorporated in 2006, was listed on the BSE SME IPO segment in 2013 and, the company within two years got migrated to BSE Main Board in June 2015. The company has head office in Mumbai and its central warehousing facility is Located at Thane, India. AIFL markets and retails a large variety of products catering to all age groups of men, women and children. Loungewear has been Valentine’s flagship product and account for 63 % of total sales. These products are made with fabrics such as viscose, knits, woven, satin, georgette, stretched and terry material, in vibrant styles. The company creates 1,000 designs in its summer collection and 1,500 designs in its winter collection with prices range from Rs. 599 to Rs. 3000. It's Valentine is its premium brand which is priced above Rs. 110. AIFL has recently brought different brands like “Night & Day” and ”N-Line” under “Valentine” brand to improve customer awareness and brand recognition. It's brand N-Line is priced between Rs. 699 and Rs. 1099. The promoter has expertise and has experience of over two decades which helps the company to design products and manage distribution effectively. The Company has strong network of 130 distributors, including an overseas distributor, 10 C&F agents and 65 salesmen all over India. It has over 15,000 point of sales, tie-ups with various MBOs along with online presence. AIFL has developed expertise in designing and distribution and outsource its products from selected vendors with stringent quality control. AIFL has adopted Asset Light business model. AIFL has a strategic manufacturing tie-up with its subsidiary Momai Apparels for high end and complex design products and sources 60 % of its requirements form it. Momai apparel has recently doubled its manufacturing capacity with new facility at Vapi, situated at Gujarat to 70,00,000 pieces per annum. AIFL has own design team and designs are made in one year advance with working on conceptualization of fashion trends, choice of fabric, colour, designing pattern, look and feel of the product etc. The design is critical in lounge wear and single product normally has five to six different Colours and fabric patterns. AIFL has 75 % sales from summer season and 25 % sales from winter products. The company is able to break up the inventory cycle due to seasonality in the business, significantly reducing the working capital requirement of the company going ahead. Ashapura used to develop 1500 designs every six months ending September and March till 2015, impacting working capital requirement. The company has split summer designs into monthly distribution with 150 designs per month now, reducing inventory and Debtor levels. It also helps in managing order flow and increasing customer footfall. The company has strategic tie-ups with larger MBOs such as Vijay stores, Globus, Central, Chunmun, Big Life and La Lingerie and is planning to add Lifestyle and Reliance Trends into this list. Apart from e-commerce, it is aggressively expanding through Exclusive Brand Outlet (EBO). It currently has 25 EBO’s and is planning to increase it to 400+ stores in next three years. The intimate wear industry is still largely fragmented and the demand is shifting towards fashionable intimate wear with emphasis on branding. The migration to organised market in lounge ware is expected at higher rate due to lower price difference of 15 % to 30 %. EBO's will help the company to display wider products and create stronger brand along with margins improvement, EBO has 10 % to 12 % higher EBITDA margins. Besides EBO the company also has MOU’s with leading online shopping sites like Myntra, Jabong and HomeShop 18, company also has its own website. The company has strategically taken a stance on consolidating the business by focusing on improvement of margins, reduction of working capital and reducing debt which is reflecting in their financials for the year. The management and shareholders have approved to merge its listed subsidiary Momai Apparels Ltd with AIFL. Accordingly, AIFL will issue 10 fully paid up equity shares of Rs. 10 each for every 27 shares held in Momai Apparels Ltd, this means AIFL will dilute 10.10 % of AIFL’s equity, but looking at the scheme it will be beneficial for AIFL shareholders as the Networth of AIFL was Rs. 49.20 Cr with total revenue of Rs. 179.18 Cr in 2014-15 and for Momai the Networth was Rs. 61.41 Cr with total revenue of Rs. 123.10 Cr. This scheme is the backward integration of AIFL business thereby consolidating its business operations, this will improve competitive position of the combined entity in the market, great utilisation of cash and cost reduction, opportunity to leverage brand and goodwill, access to broader market, the scheme will create greater integration and greater financial strength and flexibility for the amalgamated entity. Last year, AIFL has allotted 5 warrants of face value of Rs. 3.25 Cr each aggregating to Rs. 16.25 Cr to the famous brand equity master Bennet Coleman & Company (BCCL) on preferential basis on October 13, 2015 at a conversion price of Rs. 262.91 or at Formula price being the price per share equal to the weighted average of closing price of the shares quoted on BSE during 26 week preceding the expiry of 17 months from the date of allotment of warrants i.e February 17, 2017. The company raised the warrant money for its Brand building, and has appointed new Advertising agency for its promotion & advertisement of its brand. AIFL has till now utilized around Rs. 1.11 Cr with Rs. 15.13 cr still remaining as unutilized money. For the quarter ended June 2016, the Company registered net sales of Rs. 52.12 Cr. Net profit stood to Rs. 3.11 Cr. During the quarter, operating profit is Rs. 6.64 Cr. Profit before tax (PBT) at Rs. 5.02 Cr. The company also registered an increase in its reserves from Rs. 29.73 Cr a quarter and year ago to Rs. 42.07 Cr this quarter a increase of 41.50 %. The company has reported an EPS of Rs. 1.59 as against an EPS of Rs. 1.56 in the corresponding quarter of the previous year. The company has a very less free loat of 62,80,000 shares so any positive news could trigger a upper circuit. At the current market price of Rs. 301.55, the stock is trading at 48.68 x FY17E and 41.42 x FY18E. Earnings per share (EPS) of the company for FY17E could be seen at Rs. 6.20 and Rs. 7.28 in FY18E. Ashapura Intimates Fashion Limited (AIFL) has created niche market for lounge wear through brand name “Valentine” and is in the business of designing, branding, marketing and retailing of clothing products such as lounge wear, sleep wear, innerwear and sportswear. The company is targeting growth through retail, EBO and e-commerce with focus on design, distribution and brand development. AIFL would be one of the major beneficiaries of growing organised retail and e-commerce in India with its strong brand and unique product portfolio. It is expected that the company will keep its growth story intact in the coming quarters also.  

SALES ( Crs) 178.60198.20220.10 244.30 
NET PROFIT (₹ Cr)8.6710.2012.1014.20
EPS () 4.445.236.207.28
PE (x)67.5657.3648.3841.20
P/BV (x)9.1011.8911.1011.40
EV/EBITDA (x)22.8721.7019.8518.17
ROE (%) 17.60 20.70 24.6028.90
ROCE (%)14.58 38.6538.6538.70

As I always say, I am a long term believer in markets & I do respect the markets and will keep a strict stop loss of 8 % on every purchase(Why Strict stop loss of 8 % ?) -  Click Here

*As the author of this blog I disclose that I do not hold  ASHAHPURA INTIMATES FASHIONS LTD in my any of the portfolios. 

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This is a personal blog and presents entirely personal views on stock market. Any statement made in this blog is merely an expression of my personal opinion. These informations are sourced from publicly available data. By using/reading this blog you agree to (i) not to take any investment decision or any other important decisions based on any information, opinion, suggestion, expressions or experience mentioned or presented in this blog (ii) Any investment decisions taken if any would be his/hers sole responsibility. (iii) the author of this blog is not responsible. 

As a Disclosures I Confirm that : 
I confirm that I shall not deal or trade in securities mentioned in this article within thirty days before and five days after the publication of this article. I also confirm that I will not deal or trade directly or indirectly in securities mentioned in this article in a manner contrary to the ideas put forth in the article. I have not received any financial compensation for writing this article.





  1. Super bhavik Bhai.thanks every much.

  2. Great insignts Bhavikk. Being in the fashion genre, your statistics appeal me.
    Good job! Thanks for sharing! Have a great week ahead. Cheers! :)

  3. looks like a robust invest...more so from a long term perspective!

    1. Hii Shweta,
      Welcome, happy to see you here..
      Yeah AIFL indeed is a good company - posted on 13 Aug at Rs.301 and today at Rs. 371 a 23% in matter of days and yes still more to come once the merger with momai appearls is completed by Oct 2016.
      Thanks and do visit again Shweta ..and have a great evening :)

  4. Awesome suggestion. I bought late from your suggestion at 301, but still managed to get 14% profit. Thanks for helping us

  5. Thanks for contributing your important time to post such an interesting & useful collection. It would be knowledgeable & resources are always of great need to everyone. Please keep continue sharing.commodity tips


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