Analysis of Textile stocks

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Textile Industry is a group of related industries, and each of the industry is significant in a particular way. These industries use a variety of materials which may be natural i.e. cotton, wool, etc. or synthetic fibres for producing fibres. Textile industries contribute to the economy of a country and is considered as an indicator too. It differs from country to country, whether the textile industry operates through large scale or small-scale method, worldwide.

 

TYPES OF TEXTILE INDUSTRY:

 

Textile Industry being a group of related industries consists of various types: –

  1. Textiles:

The word “Textile” is from the Latin word “textilis” which means “woven” or “to weave”. Textiles means any filament which can be fiber or yarn that can be made into fabric or cloth. Threads, cords, ropes, lace, embroidery, nets and fabrics made by weaving, knitting, bonding, felting or tufting are textiles.

  1. Textiles – Spinning:

Spinning is one of the most important part for production of clothes. Spinning is the process of taking textile fibers and filaments and converting them into yarn. In the earlier periods, yarn was spun from natural fibers to yarn using labor (by hand). As up-gradation was made in all fields of life, an up-gradation took place in the spinning industry and today there are many methods and different machines being used to spun natural fibers to yarn.

  • Textiles – Apparel:

The apparel industry is the same as the fashion/clothing industry. It consists of transformation of the fabrics into clothing and other accessories. The textile sector is included in collecting raw materials and converting them into fibers, the spinning sector then converts into yarn, and then dyeing and finishing the fabrics made from the yarn. The apparel industry consists of cutting fabrics and other materials and sewing them together to create apparel or accessories, including footwear, outerwear, pants, and tops.

 

 

COMPANY’S NAME, SECTOR, PROFILE, NEWS, PRICE CHANGES & CURRENT PRICE:

(Current prices are the closing prices as on 31st July ’20)

 

  • BELLA CASA FASHION AND RETAIL LIMITED –
  • Textile

Bella Casa Fashion & Retail Limited is an India-based company, which is engaged in manufacturing of garment and other textile items.  It manufactures printed/dyed/bleached fabrics to be sold in long length form in domestic and export market. The Company offers its products under the brand names of Bella Casa, Bella and Royal Home. The Company exports its products to the Middle East Countries.

  • March ’20 Net sales recorded was Rs. 35.45 crore, down 1.13% YoY.
  • Quarterly Net profit- 0.97%.
  • Price on July 24, ’20 was a 52-week low, price- Rs. 60.
  • Technical rating indicates a very bearish trend.
  • Fundamental- Company has zero promoter pledge.

(Promoter pledge means securing shares to meet working capital requirement, a company having zero promoter pledge is considered as a good sign.)

 

  • Price Changes-

31st July ’19- Rs. 135

  • Peer competition.
  • Promoter holding has decreased over last 3 years: -5.55%

Current Price: Rs. 65.95

 

 

  • CANTABIL RETAIL INDIA LIMITED –
  • Textile

Cantabil Retail India Limited is engaged in the business of designing, manufacturing, branding and retailing of apparel and apparel accessories through chain of retail store under the brand name CANTABIL and Bonetti. The Company has a network of over 150 retail outlets.

  • March ’20 Net sales recorded was Rs. 99.91 crore, up 7.08% YoY.
  • Quarterly Net Profit- 40.56%.
  • Technical rating indicates a neutral trend i.e. not too bullish, not too bearish.
  • Exponential moving average crossovers indicate a bullish trend.
  • MACD indicates a bearish trend and thus a correction can be expected.

 

  • Price changes-

31st July ’19- Rs. 223.10.

  • Net sales between the period of March ’19 to June ’19, there was a drop in the net sales of 52.85%.

Current price: Rs. 293.35

 

  • CENTURY ENKA LIMITED –
  • Textile and Apparel.

Century Enka Limited (CEL) is engaged in the business of nylon tire cord fabric and polyester/nylon filament yarn. The Company’s geographical segments include In India and Outside India.  It produces a range of nylon processed yarns for various application areas under the Enkalon brand. Its manufacturing sites are located at Pune (Maharashtra) and Rajashree Nagar (Bharuch-Gujarat).

  • March ’20 Net sales recorded was Rs. 344.27 crore, down 20.78% YoY.
  • Quarterly Net profit- 21.88%.
  • Technical ratings indicate a very bearish trend.
  • Exponential moving average crossovers indicate a neutral trend.
  • Community sentiments gives a mixed sign of 62% BUY, 38% SELL.

 

  • Price changes-

184.30 – 31st July 19

Current price: Rs. 163.20

  • Decline in net profits.
  • Net sales in March ’19 was up 5.95%, in June ’19 it came down to

(-)7.55 net sales.

Current price: Rs. 163.20

 

 

  • FIBERWEB INDIA LIMITED –
  • Textile

Fiberweb (India) Limited is engaged in the business of manufacture of spun bonded Non-woven Fabrics from polypropylene. The Company also manufactures and exports garbage bags and carrier bags. The Company operates through Polymer Processing segment.  The Company exports its products to countries, such as the United States, the United Kingdom, Europe, Australia, New Zealand, South Africa and Gulf Countries.

  • March ’20 Net sales recorded was Rs. 22.21 crore, down 40.38% YoY.
  • Technical rating indicates a very bullish trend.
  • MACD Histogram indicates the stock to be on the bullish side.
  • Stock price recording lows just above the support of 50 and 100 Exponential moving averages (EMA).
  • Technical indicators indicate the stock being bullish, but the community yet gives a sign of 100% SELL.

 

  • Price changes-

31st July ’19- Rs. 12.65

  • Tax rate seems low.
  • Promoters holding decreased up to 6.44%in the last 3 years

Current price: Rs. 22

 

  • GOKALDAS EXPORTS LIMITED –
  • Textiles and Apparel

Gokaldas Exports Limited is a holding company. The Company is engaged in the manufacturing of apparel and clothing. The Company mainly operates in two geographical segments: In India and Outside India. The Company is engaged in the business of design, manufacture and sale of a range of garments for men, women and children, and caters to the needs of various international fashion brands and retailers.

  • March ’20 Net sales at Rs. 355.92 crore, up 8.52% YoY.
  • Quarterly Net profit- 5.97%.
  • Mutual fund investors reduced their shareholding stake of this company.
  • Technical rating indicates a bullish trend.
  • The Accumulation Distribution Line (ADL) indicates a downtrend.

 

  • Price changes-

31st July ’19- Rs. 80.65

  • Low return on equity of -10.42% over the last 3 years.

Current price: Rs. 43.25

 

 

 

  • LAKSHMI MACHINE WORKS LIMITED –
  • Textiles- Machinery

Lakshmi Machine Works Limited is an India-based holding company. The Company is engaged in the manufacturing and selling of textile spinning machinery, computer numerical control machine tools, heavy castings, and parts and components for aerospace industry. Its products and services include aero structure components, aero engine components and sheet metal fabrications.

  • June ’20 Net sales recorded was Rs. 168.78 crore, down 63.21% YoY.
  • Quarter Net loss- 21.62%.
  • On July 27, the stock price closed above its 150-day moving average i.e. Rs. 2889.90.
  • Technical rating indicates a very bullish trend.
  • AGM was conducted on 24 July ’20.

 

  • Price changes-

31st July ’19- Rs. 4044.50

  • The company has delivered a poor growth of -8.75% over past five years.

Current price: Rs. 2992.65

 

 

  • NANDAN DENIM LIMITED –
  • Textiles and Apparel

Nandan Denim Limited is an India-based integrated denim fabric manufacturing company. The Company’s geographical segments include India and Rest of World.  The Company also produces khakis. The Company focuses on having a denim manufacturing capacity of 110 million metric tons per annum.

  • Fire at Piplej, factory of the company took place on 8th February ’20 causing a loss in their financials.
  • Technical rating indicates a bearish trend.
  • Exponential moving average crossovers indicate a neutral trend.
  • MACD Histogram indicates a bearish trend.
  • Price trending on as low as 50 EMA.

 

  • Price changes-

31st July ’19- Rs. 27.70

  • Inefficient use of shareholder funds – ROE declining in the last 2 years.
  • Decline in Quarterly Net Profit (YoY).

Current price: Rs. 19.80

 

 

  • S P APPARELS LIMITED –
  • Textiles and Apparel

S.P. Apparels Limited is an India-based company, which is engaged in the business of manufacturing and exporting of knitted garments for infants and children. The Company operates in two divisions: Garment Division and Retail Division. The Company manufactures and retails menswear garments in India under the brand Crocodile. The Company owns Natalia brand, which offer products in the women’s essential garments category.  Its subsidiaries include Crocodile Products Private Limited and S.P. Apparels (UK) (P) Limited.

  • March ’20 Net sales recorded was Rs. 156.61 crore, down 26.56% YoY.
  • Quarterly Net profit- 2.81%.
  • Technical rating indicates a very bearish trend.
  • Exponential moving average crossovers indicate a neutral trend.
  • Fundamental- Company is on-going with a low debt liability.

 

  • Price changes-

31st July ’19- Rs. 252.55

  • Major fall in Trailing Tail Months (TTM) Net Profit.
  • Declining Revenue every quarter for the past 2 quarters

Current price: Rs. 68.30

 

  • TCNS CLOTHING –
  • Textile

TCNS Clothing Co. Limited, formerly TCNS Clothing Co. Pvt. Ltd., is an India-based company, which offers women’s apparel platform. The Company designs, manufactures and sells ethnic wear, targeting women between the ages of 25 and 40. The Company’s brands include W, Aurelia and Wishful. Its brands are present in approximately 1,600 points of sale across India, Mauritius, Sri Lanka and the Middle East, and in over 300 stores in approximately 100 cities. Its brands have presence across multi-brand retailers and online portals.

  • March ’20 Net sales recorded was Rs. 219.21 crore, down 24.58% YoY.
  • Technical rating indicates a very bearish trend.
  • Community sentiments give a mixed sign of 50% BUY, 50% SELL.
  • MACD Line being below the ‘0’ line, indicates a bearish trend.

 

  • Price changes-

31st July ’19- Rs. 732.45

  • Though the company is reporting repeated profits, it is not paying out dividend
  • Promoter holding is low: 32.33%

Current price Rs. 330.10

 

  • VICTORIA MILLS LIMITED –
  • Textiles and Apparels

Victoria Mills Ltd. manufactures and sells cloth, yarn and cotton waste. The Company manufactures dhoti’s, sarees, shirting’s, printed poplins, voiles, grey and bleaching long cloth, gadlapat and coatings. The Company is equipped to perform printing, dyeing, bleaching, calendaring, mercerizing, yarn dyeing and sulfuring operations.

  • Technical rating and exponential moving average crossovers indicate a neutral trend.
  • Fundamental- No debt company.
  • Weakness- Decline in quarterly net profit.

 

  • Price changes-

31st July ’19- Rs. 1959.60

  • Company has a low return on equity of 2.69% for last 3 years.
  • Decline in Net Profit (QoQ)

Current price: Rs. 1898.35