Singer India – A Rare Financially Strong Turnaround Small Cap Gem

SingerHome SingerBlender SingerCooler SingerInduction SingerSewingMachine SingerProcessor SingerKettle SingerJuicer SingerIron SingerHeater

Singer” is a legendary brand and is synonyms with sewing machines worldwide, though its business has evolved over the last few decades. Singer India Ltd, is the listed Indian subsidiary of Singer. Last decade had been really bad for singer india, where in mid-2000s the company was making huge losses (due to high competition, management infighting and J&K factory’s labor issues) and its entire net worth was wiped off and as a result, it was referred to BIFR as a sick company. In the year 2008 with a new Top management at helm, a restructuring plan was unveiled for the revival of Singer India. Various steps were identified to heal the fiscal health of the company, like, adjusting accumulated losses against share capital, infusion of fund by hiking stake of its parent, a one-time settlement with banks, settlement with unsecured creditors etc, helped Singer India to pare down its debt and accumulated losses to a much more manageable level. Once the balance sheet was repaired, the company then started focusing on operational turnaround.

With an eye on prudent capital allocation (and partly because of J&K plant’s issues) the management started outsourcing the manufacturing of sewing machines and with its concentrated efforts on high end sewing machines, the profitability also started to look up. A couple of years back the company re-entered small appliances business and that business has grown at a CAGR of 200%, albeit on a much lower base thus far.

As a result of all this Singer India was discharged from the clutches of BIFR on Feb 2013. The company also declared its maiden dividend of 15% last year. Furthermore, last year the company settled its disputes with the workers of J&K factory, and the factory started its operation in H2. The power disputes that was plaguing the J&K factory was also resolved with the assistance of J&K government.

Past Tense Future Perfect:

To bolster further growth, the company has decided to export Sewing machines from India. The Sewing machine market itself is growing at a rate of 3% but most of the market is dominated by unorganized sector and Singer hopes to capture market from them. Singer India has found a new line of customer for its sewing machines – the youth. The company says, that with its technically advanced Sewing machines, youngsters are finding it very easy to play with fabrics and are coming out with their own custom designs. This has opened a new, unique line of customers for Singer India. In the organized sector of Sewing machines, Usha remains the biggest competitor.

The restarting of Jammu factory has opened many avenues for the Company to grow the sewing business in future. The small appliances market, which is a large and growing market, offers tremendous opportunity to the Company to expand this business with its strong brand equity. In home appliances they have various products likes, Food Processors, Juicers, Induction Cookers, Desert Coolers, Heaters, Irons, Toaster, Kettle, Sandwich Maker etc. The brand equity of Singer is really pushing the sales of the small appliances in a different orbit – as evident from 200% CAGR growth of this category.

Singer Bangladesh, Singer Sri lanka (and Singer-in-our-unfriendly-neighborhood) – they each are almost 10 times the size (market-cap) of Singer India but less than 1/10th the size in population. This gives Singer India a huge scope of appreciation. Furthermore, if we analyze the business of those Singer subsidiaries, they all have followed the same template of growth:

  1. Start with Sewing Machines
  2. Diversify into Consumer Durables
  3. Introduce all variety of Consumer durables
  4. Create a strong retail and dealer network
  5. Gradually transform itself into a multi-brand retail network.

If we analyze each of the south-Asian subsidiaries we would recognize, they all have been through this template (explained beautifully here -> Given whatever has transpired so far with the Singer India (manufacturing sewing machines and entering into consumer durables), it seems it will also follow the same development framework. If this is the case, we know we have a company that is going to have a massive addressable market, not to forget a brand with very high recall.

Financial Profile: Singer India is a debt free company in consumer durables sector, having a market cap of around 125cr with Average return on capital employed (3-Years): 49.87% , Average return on equity (3-Years): 78.50% And Return on assets (3 years): 49.20%. These are stunning numbers. The company has also started generating free cash flows. Singer India gives 1% of its turnover as royalty payment, which is given every quarter-in part. The parent company (promoters) holds 75% of rs 10.74cr equity. The company is a must have stock, in every investor’s portfolio as it is financially very strong and therefore, is safe and stable, but with the turnaround performance and earnings growth possible in the next few years, it gives the appreciation of a growth stock. Singer India is one of the rare small-cap gems.

Technicals: The Company touched a new lifetime high today, and had given a breakout on massive volumes yesterday above the resistance of 105rs after more than 2 yrs of consolidation. This is extremely bullish again.






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105 Responses to Singer India – A Rare Financially Strong Turnaround Small Cap Gem

  1. Prabu says:

    Hi Sir,

    Thanks for your recommendation. I bought singer India at 136 today. You have mentioned as extremely bullish.What is your short and Medium term targets as per your view.Please advise.
    Good to see people like you helping small investors like me. Keep continuing your good work.


    • I hope you bought the shares after thoroughly researching it. I do not have targets. My belief is that given the tailwinds the stock could easily double in next 12-15 months. So should you sell after it. I will not if the fundamentals are still intact. One should not sell the winners. One should keep holding the winners and cut losers. One should also partially book profits so as to keep cash for future picks. But one should never loose sight of the invested company and keep tracking the news that could affect the company. Best of Luck with your investment.

      • Prabu says:

        Yes Sir… I am new to Market.. I am learning everyday from people like you.. I verified the basic things of this stocks and everything is indicating good future.Thanks for your pick and keep it up.. Expecting many more picks in future.

        I have a question like when a company announces a dividend at what time the amount will be credited to our account. Also whether share price will decrease when company announce dividend ??


        • 1. When company announces a dividend, normally a cut-off date annoucement folllows. On that date, whosoever has stock in his demat account will get the dividend. Share price might decrease on ex-date, but that may or may not happen, depending upon the demand for the stock. If the stock is going from circuit to circuit, you would not see that, but its more relevant on bigger stocks. One should not worry about it though, coz you would hardly ever notice it. This is relevant mostly for F&O players. So do not worry about it.

      • Prabu says:

        Thank you for your timely reply sir.. Its great to see a response in such a quick time.. Please advise whether you track below stocks and whether I can buy/hold them in my portfolio. I am holding these stocks currently with little loss.

        Lanco Infra
        Eon Electric
        Multiase India
        Galaxy Entertainment


      • prabu says:

        Thank you sir !!! I bought Nilkamal at 326…. How should I call you ?? Are you comfortable with Sir ?

      • Prabu says:

        There was a miscommunication in the last message. . I just wanted to know whether you are comfortable with me calling you as “SIR” 🙂 :).. Or whether I need to use your name if you provide it ??


        • Oh ok. I am very uncomfortable if anyone calls me sir 🙂 but for some strange reason everyone calls me sir on this blog. Actually, you can call with my alias, which is aceinvestortrader and I would feel very comfortable and free while communicating with you or anyone, if they do so. Cheers.

    • Prabu says:

      Kopran Rocking today sir 🙂 🙂

      • Prabu says:

        Singer India Locked at Upper Circuit 🙂 🙂 Expecting many more circuits 🙂 🙂 Thanks a lot sir .. I am ur fan 🙂 🙂

        • Hey, pls do not expect singer india to go UC again. Its gone up 30% already in last 2-3 days. It has to come down, hopefully… The stocks that go on UC come down in LC and thats when small investors, with weak conviction lose sleep.

  2. Vivek says:


    Whats your view on Panasonic Appliances India Company?


    • I would not invest in it given the alternatives we have. Too expensive, very bad ratios, hardly any growth, and very risky because of low volumes. Why would you want to invest in panasonic and not in Singer. Singer is growing consistently at 25% CAGR, with excellent return ratios, and very good liquidity. “Opportunity Cost” is very high if you invest in Panasonic. Think about it brother. Best of luck with your investment.

  3. Lynch'sPupil says:

    Nice pick ace. If it corrects tomorrow, we can see some panic selling and add some more

  4. Ravi multani says:

    dear aceinvestorji,
    I want to know about dynamic industries
    company has shown growth in straight four quarters and revenues are close to 104 crore and profit is approx 6 to 7 crores market cap is only 19 crore pls give your valuable advice should i buy or not
    Thanking you

  5. Vicky says:


    Do you think sharp india is good to enter at cmp or do you see further downside? Also your inputs on Praj industries pls?

    Thanks a lot

  6. thakral says:

    wts ur view on tokyo plast…I thinks its a really good bet..

  7. thakral says:

    wts ur view on tokyo plast…I thinks its a really good bet..

  8. thakral says:

    there is one stock ganesh ecosphere…a waste managment company…recently order from coca cola company…stock has been rerated from 30 to 120…although there is huge debt…..ur view on this will be appreciated..

  9. Salim Khan says:

    Hi, following scripts are in my portfolio : ILFS manager @ 15/-/40K, TRF @140/-/10K, Bilcare @ 96/-/10K, , HSIL @120/-/10K, Sanghvi Movers @ 89/-/10K, Suzlon @ 27/-/30K, Gujarat Borosil @ 25/-/20K, Dynamic Products @47/-/10K, WaterBase @ 50/-/20K, Ramco systems @ 330/-/1K. Kindly advice if these stocks in long term will give multibagger gains on rotational gains.

  10. Salim Khan says:

    Dharmesh….do not jump with just V2……I hope u have heard the tortoise story!

  11. ASHWIN says:

    Whats ur view on spice jet ?

  12. Vijaya says:

    Sir, I just recently came across ur website, and after reviewing ur blog I am very much impressed and the service which u r doing for the public is very much appreciable, hats off….. my question is I bought jain irrigation (250 shares @125), pl advice me what to do…… hold it or sell and buy any of ur recommended stocks (singer, waterbase or sharpindia). waiting for ur reply…..thanks.

    • jain irrigation is a big stock with huge market cap. FII have a better hand at moving that stock. Moreover I do not track large cap stocks. You can obviously buy one of the recommended stocks.

  13. ASHWIN says:

    i m new to this blog… i saw ur calls on singer nd v2r and i think i really missed ur 2 great calls…. can u pls tell me which stock should i buy also at what rate ? Also when u r going to give ur next call pls confirm us one day before that .

  14. harish shenoy says:

    Any views/research done on land valuation of few of the defunct textile mills holding huge track of land parcel in prime cities? Recently read binny ltd sold small part of land holding in Chennai for 490 crores. Southern railway acquiring 3.4 acres out of 22 acres of SV Global mills @ majestic area of Bengaluru for 70crores, to be compensated further based on recent land acquisition act. Can we anticipate such companies to unlock hidden value by floating REITS?

  15. Vij says:

    Hi aceinvestortrader,

    Whats your view on Gabriel India and Rubfila int? Thanks

  16. ASHWIN says:

    Trigyn Technolgy i think is a turnaround story, breakout from long consolidation of around 12 yrs, consolidated result excellent, 7times from its low in the last 1 yr , daily hitting upper circuit. I m holding from last 10 yrs. Pls share ur view aceinvestor

  17. ASHWIN says:

    IB SECURITIES trading @ 24 , dividend paying Rs 1 from the last 8 quaters investor friendly , result not very encoureagely but future looks good for capital market and brokerage firm… whats ur view sir ?

  18. rajddepsandhu says:

    Dear. Aceinvestor, I find out one small cap stock which is making good turnaround from the last two quarters cupid ltd, they are basically in making of condoms of male and female, it was first company india to launch woman condom but now they are getting also good orders from different wings WHO different wings in different countries, please give your view, although it may not be in attractive sector but value wise now it is quite cheap

    • its the most attractive sector, but the problem is with the earnings. Last 5 yrs earnings have not been that great. I mean its lumpy. Thats why it would take a lot of courage to take a call on this. Its ofcourse in my watch list for sure. I like the sector a lot.

      • rajddepsandhu says:

        Today also they got order of about 5.87 crore from UN population fund Denmark, earlier they were getting orders from African country but now they are getting from developed countries and in india its brand is quite recognizable, although it could be risky because there profitability margin may have increased due to softening of rubber prices in international market

  19. thakral says:

    dion global can be an multibeggar..recently mahindra has picked some stake….wts ur view

  20. rajdeepsandhu says:

    HI aceinvestor, What is your view on rexnord electronics and controls earlier on its earning were not growing but now they are showing positive trends, it is looking good, please give your perspective on it.

      • DH says:

        Dear aceinvestor, on friday we witnessed high volumes in V2 Retail. Seems like there was some seeling seen, even though it closed on UC. Whats ur take?

        • my take does not change in a week. And l do not even expect the stock to go up in one direction only. If one has conviction in the stock, only then one should invest in it. V2 has already given a return more than 50% in a couple of weeks. I expected it to double in a year, if everything goes well. But the bigger question you should ask yourself is that are you convinced about V2? If you expect any stock to go up in circuits then be prepared for a series of LCs also. have faith and conviction in a stock and only then invest.Cheers.

      • DH says:

        Thanks for your response..

  21. kumar says:

    Hi Aceinvestor any update on kopran,looks like given multi year breakout ,looks like is going towards 3 figure mark, and please update on results as well as they rlooking down.

  22. rajdeepsandhu says:

    Hi aceinvestor. I am also investor in sharp india. Ministry of corporate affairs recent guidelines on related party transactions applicable to sharp India since more than 100 crore sales to sharp business systems good for us minority shareholders, How we can know whether sharp india is favoring sharp business systems by selling through because in earlier two quarters they have given support to sharp india so that means they must have made that profit from sharp india but in this quarter they do not support it and they also may keep higher amount of profits in sharp business systems because it is 100% subsidiary of sharp japan, they would gain much, this issue could be raised in AGM which may happen next month, because otherwise marketing companies have not so much of margins,

    • True, infact I have already raised a concern regarding this (favoring SBS w.r.t Sharp India) with the management, but they were adamant that there is no favoring. In any case this should be raised in AGM (whosoever attends it should raise it ).

  23. rajdeepsandhu says:

    the same thing has happened with Maruti gujarat plant for they said early on that plant will be under directly suzuki japan because they have directly funded it to derisk maruti india so they will give them fix margins to the aruti India for which lot of investors raised concerns how could be maruti india remain manufacturing by sellin on fixed margins and then should also get trading company multiple, uptick in business cycle in auto will benefit directly to Suzuki japan, so Now Mr. Bhargava has said they are going to do special vote for the small sharesholders and but they have quite good number of shareholders from FII and mutual funds who monitor and this has been raised urgenly, even in maruti case independent director have not raised any concerned about it, but in sharp I am going to write Mr. Rakesh Khanna who is holding more than 1% stake please raise it at the AGM if he attends and vote it from small shareholders on it sharp business systems and that they should give also balance sheet of sharp business system so we can assess and see how much expenses they are doing on selling sharp india products and how much profit they are making because of the sharp india products selling and now more than 100 crore of sales are through the SBS. It is one of concern for me and other long term investor that these type of corporate governance issues do not happen in sharp indi

    • Do you know who is mr.Rakesh Khanna ?

      • rajdeepsandhu says:

        i have only read about his comment on moneycontrol on sharp india blogging so I got to know about him and I also checked shareholding of sharp india in which he is holding more than 1% stake so I got know that issue of ministry of corporate affairs related party transaction of more than 100 crore through him, If you know about him better please tell
        I wil be grateful you, I am knowing only like I am blogging with you, I have send message on moneycontrol for him about this but I do not know he got message or not

        waiting for your reply

  24. rajdeepsandhu says:

    I have seen him on the blog of Sharp india only and very rarely, he has raised only very pertinent questions about the company like issue I have discussed above and when people are talking about that company is going to achieve all these things in one or two months, like saying results are going to be so good, although results are good but they have raised expectation like it is going to do everything this quarter, but he always talked like serious investor so I have inference that he must be rakesh khanna because he has only given very balanced view, when people were saying that sharp is going to do well in short term on basis of results, he said there could be slight disappointment what people are expecting from in this quarter, so I judged from his perspective that he is serious investor, although I am not 100% sure about his identity.

  25. thakral says:

    when ur next pick is coming..

  26. Divi says:

    Dear Aceinvestortrader,

    What is u r view on JBM auto and Lloyd Electic..having good conviction and taken position on these..

  27. pruthvi says:

    Sir, kindly comment your views on Lloyd electric. It is trading at very cheap valuations compared its peers. CAN IT BE A MULTIBAGGER LIKE SHARP?. sharp is budding, lloyd looks little grown up.even though it is better to catch them while budding how about this slightly elder company?????

  28. Varun says:

    I bought Singer at 156, and the stock is down to ~145. At my entry point, is there any value in the stock? I know I should have done all this pre-buying, but saw a few UCs, your reco + brand recall and bought 😦

  29. rajdeepsandhu says:

    today sharp india have asked for approval in AgM to be held inter party transaction with SBS to increased 500 cr annually for next three years and that management is hopeful that good growth is going happen in next 2 to 3 years. I also received annual report today in which they also mentioned that they are thinking about manufacturing other products in sharp india that is also good for growth of company but management discussion about threats they also mentioned marketing expenses are increasing which can reduce margin, I think it is likely due to we investor are asking them questions about SBS that how much expenses they are spending on marketing they are trying to tell they are quite bit, but can we shareholders ask about SBS report so we can about how much prices they are selling the product they are marketing for sharp india and what type expenses they are doing on it so we can make assessment whether they are making making good margins or not, if somebody ask them about that also in AGM, some things are good that company thinking about making it about sharp india as manufacturing base and they also asked about approval for 30 crore of export to sharp subsidiares in other countries. I also got know that sharp japan has made profit after two years and they are projecting good picture about next year also. Mr. Modi is also going next Japan, these all auger well for sharp india, Please give yours views about it and your perspective all the things which happened last few days..

    • AR looks promising. By the way they also said in page 10 “Your
      Company is also exploring the possibility of manufacturing of other
      home appliances”. This is good. Long term its looking great. The management is making all the right moves.

  30. Karthik says:

    Came across your blog recently. Awesome informative blog for the retail investors like me.
    Wanted to check if you are tracking Asian Granito, and your opinion on the stock. Can we enter it at the current levels?
    Thanks a lot!

  31. rajdeepsandhu says:

    I think the management like has launched air purifier in this year, they first want to launch through SBS to test the ground whether they can reach the scale where the manufacturing will be viable because air purifier is also niche product, earlier on they TV capacity of which are only operating only 20 to 30% some year they made profit and some years losses, but in air conditioning they tested properly it is quite they made profit in first year, so I think conservative on part of management to launch first product through SBS is good, later if they find they can good traction and they can shift manufacturing to sharp india. Please also tell if we can ask them about annual report of SBS or not, because it is not subsidiary of sharp india

  32. A.p. says:

    As you are having eye on caplin point lab, can u plz solve some doubt in my mind?
    1)your view on recent reaults?
    2)In the balance sheet of caplin point lab, it is noted in a table that traded goods are more than manufactured goods…
    so Is company’s main business trading?

  33. bhushan naik says:

    ACE i have 340 shares of A2Z mentanance can i average it now or pls what to do pls

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