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Lovable Lingerie Premium pricing for premium brand with flagship brands Lovable and Daisy Dee, the

company is one of the leading women innerwear players in India

Promoted by Vinay Reddy, Lovable Lingerie (LLL) is headquartered in Mumbai and was incorporated in 1987. Initially named as Hyno Knit Private Limited, the company was renamed as Lovable Lingerie in 1995 and was converted to public limited company in February 2010. With flagship brands Lovable and Daisy Dee, LLL is one of the leading women Innerwear manufacturers in India, with product basket covering brassieres, panties, camisoles, home wear, shape wear, foundation garments and sleep wear products.
Brands Lovable(premium segment) Daisy Dee(mid segment) College Style(young segment) Manufacturing Facilities Two units in Bengaluru with installed capacity of 30 lakh pieces per annum One unit in Roorkee with installed capacity of 7.5 lakh pieces per annum Concessionaire-retailing model for marketing The company procures dedicated retail space in leading large format stores and makes arrangements for stocking, displays and visual merchandising of Lovable brand in form of shop in shop modules. Currently the company has 127 counters in leading large format stores across 21 cities. The network of the company constitutes 5 branches, 103 distributors, 1425 direct dealers and nearly 7500 multi brand outlets in 105 cities. In 2010, it entered in to a JV agreement with Lifestyle Galleries of London (LGL) (UK) to establish a JV company, Lovable Lifestyle Pvt Ltd, with majority 90% of the stake vested with LLL. The company is proposing to infuse capital of Rs 25 crore as equity capital in the JV Company. Lovable Lifestyle will carry on marketing, manufacturing, distribution and direct retail in the super premium segment in India and other contracted territories to be decided between the parties on the product lines of LGL in the categories of personality grooming/style, lifestyle enhancement and beauty, including but not limited to womens intimate apparels as well as mens undergarments under the London Calling brand in India. The other group entities of the company include Federal Brands, Hype Integracomm Pvt Ltd, La Reine Fashions Pvt Ltd, Holstein Ecofoods Pvt Ltd, Strategy Games Pvt Ltd, Bellini Fashions Pvt Ltd, Lovable Lifestyles Pvt Ltd, Vinay Hosiery Pvt Ltd, Reddy, and Pathare Elastic Pvt Ltd. Strength Vast experience in field 85 year old brand with global presence In-house design studio

Weakness & Threats Changing fashion, consumer preference Competition from group companies in mens wear segment Yarn, fabric prices are crucial factor Labour intensive industry

Future Plans In Lovable we are currently at little less than 1,500 retail doors and we are expecting to take that to about 3,000 retail doors in one years time. In Daisy Dee we have about 8,500 retail doors, which we currently reach through our distribution network. It operates a traditional distribution channel and we have a long range plan of three years to reach above 20,000 stores.- L Vinay Reddy Company is targeting 30% CAGR. Company is well funded for next two to three years because of last IPO so no plans to raise additional funds.
Company Bombay Rayon Pantaloon Retail Page Industries Shoppers St. Trent Raymond Rupa & Co Kewal Kir.Cloth. Mandhana Indus Lovable Lingerie Zodiac Cloth. Co KSL and Indus K P R Mill Ltd Trident Gokaldas Exports Market Cap (Rs in Cr) 3,568.92 3,044.94 2,664.85 2,137.47 2,089.23 2,035.05 1,129.70 757.49 710.76 553.98 392.58 346.83 318.21 282.74 257.85 P/E 16.48 44.11 32.69 27.05 52.88 13.27 30.3 14.2 10.09 40.46 37.81 0 10.04 4.77 0 P/BV 1.31 1.12 21.53 3.57 1.59 1.91 6.92 3.83 2.02 3.92 2.46 0.68 0.55 0.48 0.7 EV/EBIDTA 11.36 19.21 18.42 18.72 22.29 62.03 0 7.57 8.7 19.25 13.9 6.84 5.25 5.35 0 ROE 9.9 2.8 52.6 16.6 4.4 12.6 21.1 24.8 24.5 17.1 11.2 -0.6 12.7 11.7 -21.2 ROCE 8.4 6.7 48.2 20.5 5.6 8 20.5 36.2 17.7 23.3 13 5 10.9 9 -7.5 D/E 1.22 0.63 0.76 0.38 0.31 1.12 1.01 0.06 1.78 0 0.23 1.85 1 3.51 0.8

Company is debt free as on 31 march 2011. Among all the competitors its the only company with debt-equity ratio of 0/ YOY increase in sales, operating profit, interest coverage, net worth, working capital and PBDIT is quite good compared to companys competitors. However EPS of company is low in comparison to its competitors. For mar 11 EPS of company was 8.41 while the same for Page industries and Zodiac Clothing was 52.49 and 18.18 respectively. Raw material is one of the worry for company as over half of sales is consumed by cost of raw material.(mar 11 RM/sales= 53.27)

ROE and ROCE of the company is very low in comparison to its close competitor Page Industries. However at current PE of 40.46 which is the highest in the sector the stock appears to be quite expensive.

Monday, 26 December 2011