Profile of the company
The company was incorporated as Libas Designs Private Limited on November 10, 2004 with the Registrar of Companies, Mumbai, Maharashtra as a private limited company under the provisions of the Companies Act 1956 and a certificate of incorporation was issued by the Registrar of Companies, Mumbai, Maharashtra on November 10, 2004. The company was converted into a public limited company and accordingly the name of the company was changed to Libas Designs Limited pursuant to a special resolution passed by its Shareholders at the EGM held on September 14, 2016. A fresh certificate of incorporation consequent upon conversion to public limited company was issued on September 20, 2016 by Registrar of Companies, Mumbai, Maharashtra.
The company is engaged in the process of fabrication of fabric into apparels and other products through customisation, where customers can choose the colours, fabrics and designs and make changes as per their need. The company also offers an extensive range of jute bags, best suited for everyday use. With 100s of different colours and styles, customers have a good number of options to choose from. Customers may also get to design their own bag by choosing their own dimensions, colours and features such as the buttons, zippers, the handle and of course the overall styling.
The company at LIBAS RIYAZ GANGJI implements the traditional bespoke process with a modern-day approach. Right from the initial stage that involves the client preferences to constructing the most desirable outfit, it ensures complete satisfaction to its clients. Apart from retail sales, the company also undertakes wholesale business where it provides its designs to other labels. The company also gives complete solutions to corporates regarding their dressing needs and designing. The company markets its product under the brand name of LIBAS RIYAZ GANGJI and it is a well-established fashion designer brand name in Mumbai.
Proceed is being used for:
India’s textiles sector is one of the oldest industries in Indian economy dating back several centuries. Even today, textiles sector is one of the largest contributors to India’s exports with approximately 11 per cent of total exports. The textiles industry is also labour intensive and is one of the largest employers. The industry realised export earnings worth $41.4 billion in 2014-15, a growth of 5.4 per cent. The textile industry has two broad segments. First, the unorganised sector consists of handloom, handicrafts and sericulture, which are operated on a small scale and through traditional tools and methods. The second is the organised sector consisting of spinning, apparel and garments segment which apply modern machinery and techniques such as economies of scale. The textile industry employs about 40 million workers and 60 million indirectly. India's overall textile exports during FY 2015-16 stood at $40 billion.
The Indian textiles industry is extremely varied, with the hand-spun and handwoven textiles sectors at one end of the spectrum, while the capital intensive sophisticated mills sector at the other end of the spectrum. The decentralised power looms/ hosiery and knitting sector form the largest component of the textiles sector. The close linkage of the textile industry to agriculture (for raw materials such as cotton) and the ancient culture and traditions of the country in terms of textiles make the Indian textiles sector unique in comparison to the industries of other countries. The Indian textile industry has the capacity to produce a wide variety of products suitable to different market segments, both within India and across the world.
Pros and strengths
Wide range of product offering: The company has varieties of products namely Men’s wear - Sherwani, Suits, Indo-Western Wears, Nehru Jacket, Shirts and Pants, Women Wear - Sarees, Suits, Lehenga, Gowns andAnarkalis, Accessories Jewellery,Belts, Mojaris, Cufflinks, Safa and Jute Bags- Carry Bags, Gift Bags, Bottle Bags, Lunch Bags and Grocery Bags.
Quality assurance and standard: The company is providing its customers the best possible quality products. As a result of this, the company adopts quality check to ensure the adherence to desired specifications, quality and colours. Since, the company is dedicated towards quality products, processes and inputs; it gets regular orders from its customers, as it is capable of meeting their quality standards.
Customer centric business model: The company focuses on attaining highest level of customer satisfaction. The Progress achieved by the company is the largely due to its ability to address and exceed customer satisfaction. The company has always believed in assessing the changing customer preferences from time to time and redesigning its products accordingly by continuously exploring new types of trends.
Risks and concerns
High working capital requirements: The company’s business requires a significant amount of working capital for smooth functioning. For the FY 2016 and FY 2015, the company’s working capital requirements were Rs 9.97 crore and Rs 8.54 crore respectively. The company meets its requirement for working capital majorly through banking facilities or fresh infusion of funds by way of issue of shares or internal accruals. In future, the company’s inability, if any to meet its working capital requirements through banking arrangements or otherwise can adversely impacts its business operations and financial position.
Stiff competition: The industry, in which the company is operating, is highly and increasingly competitive and its results of operations and financial condition are sensitive to, and may be materially adversely affected by, competitive pricing and other factors. Competition may result in pricing pressures, reduced profit margins or lost market share or a failure to grow its market share, any of which could substantially harm its business and results of operations. There can be no assurance that it can effectively compete with its competitors in the future, and any such failure to compete effectively may have a material adverse effect on its business, financial condition and results of operations.
Highly dependent on promoters and key managerial personnel: The company and its promoters have built relations with suppliers, clients and other persons who are connected with its business. Further, the company’s Key Managerial Personal also possesses the requisite domain knowledge to provide efficient services to its clients. Accordingly, the company’s performance is dependent upon the services of its Promoters and other Key Managerial Personnel. The company’s future performance will, therefore, depend upon the continued services of these persons. Demand for key managerial personnel in the industry is intense and its inability to attract and retain Key Managerial Personnel may affect the operations of the company.
Libas Designs is engaged in the process of fabrication of fabric into garments in India. It offers sherwanis, suits, jackets, shirts, pants, and Indo Western products for men; sarees, suits, lehengas, gowns, and anarkalis for women. The company has tie ups with major ecommerce players portals and have its own portal in the name of www.libasfashion.com. It has tie ups with more than 80 Indian & international designers and have inventory of more than 500 Designer wear to choose. Currently, they have 8 stores either own or on franchisee basis. On the concern side, the company’s success depends largely upon the services of its promoters and other key managerial personnel and its ability to retain them. The company’s inability to attract and retain key managerial personnel may adversely affect the operations of the company. The company has high working capital requirements. Its inability to meet its working capital requirements may have a material adverse effect on its business, financial condition and results of operations.
On performance front, the company has reported a jump of 21.32% in its total revenue at Rs 2,149.40 lakh in FY16 as compared to Rs 1,771.73 lakh in FY15. The revenue has increased due to increase in sales of products corresponding to increase in business of the company. Moreover, the company’s net profit increased by Rs 55.83 lakh or 158.61% from profit of Rs 35.20 lakh in the fiscal year ended March 31, 2015 to profit of Rs 91.03 lakh in the fiscal year ended March 31, 2016. Net profit has increased due to increase in revenue & better management of resources.
From the shareholders’ perspective, the company’s Return on Net worth (RONW) ratio has increased to 25.77% in FY16 from 13.43% in FY15 and 14.69% in FY14, indicating that it has utilized the shareholder’s investment in very well manner to create returns for them. With the growing opportunities available in the market, the company will endeavour to continue to grow its business by adding new customers in existing and new geographies and also new market segments & products. goals, increasing sales and entering into new markets.