A Fine Finish

Alps Industries with its diverse product range including home furnishings, natural dyes and pashmina shawls has been able to show steady growth till now. Its proprietary technology in natural dyes and thrust on pashmina shawl export also looks promising. The company has the potential to be the next in the list of successful niche players.

Alps Industries with a turnover of Rs 96 crore manufactures home furnishings, made-ups, window coverings, and architectural products like false ceilings, venetian blinds, vertical blinds, drapery rods and sells under the brand name Vista Levolor.

In home furnishings and made-ups, Alps is one of the few players in the organised home furnishing market. Other big players include Bombay Dyeing and Reliance. Alps caters mostly to the premium segment.

 

Alps has been aggressively introducing new products. It introduced laminated wooden flooring called Vista Floor Fashions last year. It has also started exporting pashmina shawls using natural dyes. Alps also produces awnings which is used to cover open spaces like large windows, terraces and shop fronts. Apart from all this, the company also undertakes exports of fabric and knit garments which it outsources.

The company's export markets include USA, Canada, Europe, Japan and south-east Asia. It has been exporting its products to leading international stores like Habitat, JC Penny, Bloomindales, Bed Bath & Beyond and Kmart. The company has been granted a Golden Trading House status.

The company's largest divison consists of home furnishings and made-ups which together contribute about 65 per cent of total revenue. The division is fully integrated with a facility to produce natural dyes, fibre dyeing, spinning, weaving, processing and fabrication. The company is planning to further enhance its weaving capacity.

The company produces standardised environment friendly natural dyes extracted from fruits and vegetable wastes and flowers. It has set up a laboratory in collaboration with Technology Information Forecasting & Assessment Council (TIFAC) and Indian Institute of Technology (IIT), Delhi. The company also plans to produce and sell cotton fibre dyed with its own natural dyes. It commissioned additional capacity for fibre dyeing in the Jan-Mar 2000 quarter.

Last year, the company launched `eco-pashmina' shawls dyed with natural dye. The response from the US and Europe has been encouraging. This product is expected to contribute about 25 per cent of total export earnings in the next two years. The company is planning to launch the same product in the domestic market this year.

Alps has a distribution network of about 150 dealers. Its products are sold in 300-odd multi-brand showrooms. There are plans to further increase the display points mainly in Mumbai and other western cities. The company is in the process of launching a vertical portal leveraging its knowledge base of the interiors industry, its relationship with architects and interior decorators. It will go online in July.

In the past three years, the company has shown a steady topline and bottomline growth. Sales in fiscal 1999-2000

stood at Rs 96 crore with net profit at Rs 8.45 crore, registering a growth of 26 per cent and 89 per cent respectively. At 20.88 per cent, operating margin was two percentage points higher than last year.

Net margin was also three per cent higher at 8.79 per cent. In fiscal 1998-99, the company derived 67 per cent of its sales through exports.

The export thrust is likely to give a significant push to the topline. Apart from steady growth in the home furnishings, new products like pashmina shawls are likely to contribute significantly to sales and result in better earnings. Further, enhanced distribution through additional display points should also result in higher sales in the domestic market.

The stock trades at Rs 125 currently. On current earnings per share of Rs 13, the stock is discounted nine times. The stock figure

in two domestic mutual funds _ Taurus and SBI Mutual Fund. It is good buy for steady appreciation.