About The Company
House of Pearl Fashions (HOPF) is a ready-to-wear apparel company operating in three distinct business streams: manufacturing, marketing and distribution, and sourcing of garments. Basically, the company is good but right now, the investor perception for the entire textile sector, be it ready made or any apparel company, there are no willing buyers. This can be seen from the listless way in which the stock has been moving in the narrow range of Rs.35-45 since past few days. As such, things were not good for the sector with salary cuts and retrenchment across sectors. Demand has slumped and House of Pearls is also feeling the impact of this slowdown.
About The Results
This had begun to show in the bottomline of the company and it has got further accentuated during the third quarter performance, For the period ended 31st Dec 2008, the company's net sales were at Rs 11 crore versus Rs 4.34 crore in Q3FY08. Its net profit was at Rs 84 lakh versus Rs 6.5 crore. The company, in its Notes to Accounts has stated that profitability for the quarter was adversely impacted due to due to new ventures which are at the gestation period. Also its subsidiary in Bangladesh - Nor Pearl Knitwear incurred extra ordinary order executation cost in ensuring timely delivery to its customers by sending goods by Air at its own cost & by incurring high overtime. This has resulted in a loss of Rs 7.83crore for the quarter. The company has not provided for MTM forex losses which it will do so at the end of the year. Over and above all this, the global slowdown.
The stock touched a new low at 36 on 5th March 2009 but it recovered a bit on news that its subsidiary in Bangladesh is in the process of restructuring its business. This entails in a temporary closure of its manufacturing facility till 30 June 2009 and the management will, in due course review its decision of closure of factory. No major fireworks are expected in this stock. Best to avoid this out-of-fashion stock.
Disclaimer : I do not have any personal holding this stock.
No comments:
Post a Comment