Wednesday, January 12, 2011
Mudra Lifestyle Ltd is a Mumbai based apparel manufacturer engaged in the production of fabrics and apparels in own brand name and for other retailers.For the past many years company’s bottom line is stagnant or declining even if there is decent growth in top line .Low margin high volume nature of private label business is a reason for this. But now ,with the change in management control in favor of Seoul-based fashion and garment conglomerate E-Land group through E-Land Fashion China Holdings is expected to rewrite the future of Mudra Lifestyle in coming years. E-Land’s expertise and vast marketing network is expected to change the entire picture of Mudra. E-Land group owns more than 60 brands in south Korea and having operations in many other countries includes China,Hong Kong,USA,Europe..etc. E-Land acquired Mudra @ a price of Rs.60/- per share (excluding non compete fee) in last year. In FY 2010 ,Mudra posted a turnover of Rs.365 Cr and a net profit of Rs.13 Cr. Revival in demand from overseas ,favorable changes in exchange rate and control of better management may augur well for Mudra Lifestyle in long term.After taking full control ,there may be some balance sheet clean up by the new management. So investors with sufficient patience can consider a BUY @ current level of Rs.59/- which is just below to the open offer price.