Weekly Analysis of Textile Stocks

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India is among the world’s largest producers of Textiles and Apparel. The domestic textiles and apparel industry contribute 2.3% to India’s GDP, 7% of the country’s manufacturing production and 13% of the country’s export earnings. The textiles and apparel industry in India are the second-largest employer in the country providing employment to 45 million people. It is expected that this number will increase to 55 million by 2020.

India has also become the second-largest manufacturer of PPE in the world. More than 600 companies in India are certified to produce PPEs today, whose global market worth is expected to be over $92.5 bn by 2025, up from $52.7 bn in 2019.

FDI in the textiles and apparel industry has reached up to $3.4 bn during 2020. Exports in the textiles and apparel industry are expected to reach $300 bn by 2024-25 resulting in a tripling of Indian market share from 5% to 15%.

 

COMPANY’S NAME, PROFILE, PRICE & UPDATES:

(CURRENT PRICES ARE THE CLOSING PRICES AS ON 21ST AUGUST ’20.)

 

  • BANNARI AMMAN SPINNING MILLS LIMITED:
  • Current Price: Rs. 97.90

Bannari Amman Spinning Mills Limited is engaged in the manufacture of grey woven fabrics, knitted fabrics and cotton yarn. The Company is also engaged in the business of processing of fabrics, garments and wind power generation for captive consumption. It operates through Textiles segment. Its divisions include Spinning, Weaving, Knitting, Processing, Garments, Home Textiles and Windmills.

  • Technical rating indicates a bullish trend.
  • Moving average crossovers indicate a neutral trend.
  • Stock price closed above the 150-day moving averages on 21st
  • Net sales were recorded at Rs. 278 crores.
  • Net loss recorded was 8%.
  • Contingent liabilities of Rs. 138.29 crores.
  • Dividend pay-outs have been as low as 13.60% for the past 3 years.

STRENGTHS –

  • Improving cash flow from operations since the last 2 years.
  • Book value of the shares improving since the past 2 years.

WEAKNESS –

  • Major fall in TTM Net profit.
  • Fall in quarterly revenue and net profit.

21/08/’19: Rs. 127.45

 

  • BINNY MILLS LIMITED:
  • Current Price: Rs. 90.60

Binny Mills Limited is engaged in the business of warehousing and storage, and trading of textile materials. The Company operates in four divisions: Warehousing, Showrooms, Agencies and Bintex. The Warehousing division has rented its warehouses and is deriving rental income from it. The Showrooms are engaged in retail selling of textile materials. The Agencies division is engaged in the business of selling Tarpaulin, rain coats and bags.  The Company buys and sells textile materials (trading in textile), including retail sales to customers, from its textile division at Chennai and from the showrooms in Bangalore and Kolkata.

  • Technical rating indicates a neutral trend.
  • On 21st August, only sellers were available for this stock.
  • March ’20 Net sales recorded was Rs. 1.78 crores, down 9.85% YoY.
  • Net loss of 3% was recorded.
  • The company has delivered a poor growth of 4.82% over the last 5 years.

STRENGTHS –

  • Promoters increasing shareholding stake.
  • Company with no debt.

WEAKNESS –

  • High interest payments compared to earnings.
  • Declining revenue every quarter since the last 4 quarters.

21/08/’19: Rs. 28.50

 

  • CHEVIOT COMPANY LIMITED:
  • Current Price: Rs. 647.30

Cheviot Company Limited is engaged in the manufacturing and sale of jute goods. The Company’s geographical segments are Within India and Outside India. It owns Cheviot Jute Mills in West Bengal. The Company manufactures jute products and jute fabrics to cater to both domestic and international market. The Company also offers covering fabrics; stuffing’s, and other materials that are used in upholstering.

  • Technical rating indicates a very bullish trend.
  • Community sentiments indicate the sign of 100% BUY.
  • June ’20 Net sales was recorded at Rs. 24.70 crores, down 76.68% YoY.
  • Net profit of 12% was recorded.
  • Company has been maintaining a healthy dividend pay-out of 22.21%.
  • The company has delivered a poor growth rate of 11.40% over the past 5 years.

STRENGTHS –

  • High dividend with rising dividend yields over the last 5 years.
  • Company with low debt.

WEAKNESS –

  • Degrowth in revenue and profit.
  • Annual net profit declining since the last 2 years.

21/08/’19: Rs. 570.30

 

  • INDIAN CARD CLOTHING COMPANY LIMITED:
  • Current Price: Rs. 116.90

The Indian Card Clothing Company Limited is engaged in manufacture of card clothing and realty. The Company’s segments include Card Clothing and Realty. The Company’s geographic segments include Domestic and Overseas. The Company offers products, including Cotton, Woolen and Acura. The Company’s card clothing has been categorized into sections.  It offers products, such as Sharp rite wire resharpening device, Sharp rite Tops, all roller mounting machine ARM 08 and Clipit4060 Flat Clipping Machine.

  • Technical rating indicates a very bullish trend.
  • The stock price closed over the 200 days moving average on 21st August ’20.
  • March ’20 Net sales was recorded at Rs. 16.16 crore, up 0.01% YoY.
  • Net loss recorded was 2%.
  • Stock price is trading at 0.90 times of its book value.
  • Company has a low return on equity of -13.79% for the last 3 years.

STRENGTHS –

  • Stock price is being traded around the 52-week high stock price.
  • Growth in quarterly net profit with increasing profit.

WEAKNESS –

  • Inefficient use of assets to generate profits for the return on assets, ROA declining since the last 2 years.
  • Decline in net profit with falling profit margin.

21/08/’19: Rs. 90.50

 

  • JAMSHRI REALTY LIMITED:
  • Current Price: Rs. 2550

Jamshri Realty Limited, formerly Jamshri Ranjitsinghji Spinning and Weaving Mills Company Limited, is a fabric manufacturer. The Company’s principal products include yarn and cloth. The Company manufactures both polyester-cotton and polyester-viscose blended yarns, and fabrics. The Company focuses on spinning yarn and has a total capacity of 25,200 spindles. It offers Carded Yarns and Blended Yarns. The Company’s plant is located at Fatehchand Damani Nagar, Station Road, Solapur.

  • Technical rating and the moving average crossovers indicate a bullish trend.
  • March ’20 Net sales recorded was 0.84 crores.
  • Net loss recorded was 1.28%.
  • The company has delivered a poor growth of -51.18% over the past five years.
  • Company has a low return on equity of -30.75% for the last 3 years.
  • Company has low interest coverage ratio.

STRENGTHS –

  • Stock price is forming a bullish reversal pattern.
  • Company able to generate net cash which means there has been an improvisation in the cash flow for the last 2 years.

WEAKNESS –

  • Degrowth in revenue and profit.
  • Company with weak financials.

21/08/’19: Rs. 1750

 

  • RAGHUVIR SYNTHETICS LIMITED:
  • Current Price: Rs. 224

Raghuvir Synthetics Limited is an India-based company, which is engaged in the business of textile processing. The Company’s products include bed linen/bedding’s, curtains, towels, kitchen products and upholstery rang. Upholstery rang, which includes cushion covers, chair pads, sofa sets and iron board covers. Raghuvir Synthetics is engaged in Manufacturing of Textile items and Processing of the same. The business of the Company is to offer Exports of Made-ups and Processing of fabrics.

  • Technical rating and moving averages indicate a bullish trend.
  • Moving average crossovers indicate a neutral trend.
  • March ’20 Net sales was recorded at Rs. 28.44 crore, up 66.3% YoY.
  • Net profit recorded was 0.55%.
  • Company is expected to give a good quarter.
  • The company is declaring profits but not distributing it in the form of dividend.

STRENGTHS –

  • The company is effectively using the shareholder’s funds and hence, there has been an improvisation in the return on equity every year.
  • Stock price has a strong momentum as the share price is moving above the short, medium- and long-term moving average.
  • Rising net cash flow and cash from operating activity.

WEAKNESS –

  • Decline in net profit with falling profit margin.
  • Stock price is forming a bearish reversal (hanging man) pattern.

21/08/’19: Rs. 155

 

  • SHIVA TEXYARN LIMITED:
  • Current Price: Rs. 96.30

Shiva Texyarn Limited is a textile company. The Company’s products/services include Cotton Yarn and Grey Fabric. The Company is engaged in the business of manufacturing and marketing of cotton yarn and other textiles products, such as coated and laminated fabrics, home textiles and back bags. Its divisions include Spinning Mills Unit I, Spinning Mills Unit II, Knitting, Processing, Garments, Coating, Lamination, Bag Division and Windmill It has over 80 Windmills with an installed capacity of 28.795 megawatts.

  • Technical rating indicates a bullish trend.
  • Only buyers for this stock on 20th
  • June ’20 Net sales was recorded Rs. 51.31 crores, down 39.33% YoY.
  • Tax rate seems low.
  • Company has delivered a poor growth of -4.32% over the past 5 years.

STRENGTHS –

  • The stock price is building a bullish reversal pattern.
  • The stock has a strong momentum as the stock price is above the short, medium- and long-term moving averages.

WEAKNESS –

  • Downgrade by credit rating agency.
  • Annual net profit declining for the last 2 years.

21/08/’19: Rs. 108.15

 

  • SHUBHAM POLYSPIN:
  • Current Price: Rs. 143

Shubham Polyspin Ltd is an India-based company which is a manufacturer of polypropylene multi-filament yarn. The Company’s product portfolio includes twisted and air intermingled yarn, shubhlon bag closing threads, PP webbing’s and narrow woven fabrics. The Company’s yarns are used in various fields like Geo-Textiles, Filter Cloth, flexible intermediate bulk container (FIBC) High-density polyethylene (HDPE) Polypropylene (PP) Bags as Mouth & bottom closing thread and Narrow Woven Fabrics.

  • Technical rating indicates a bearish trend.
  • Moving average crossovers indicate a neutral trend.
  • March ’20 Net sales (consolidated) was recorded at Rs. 33 crores.
  • The company has a low interest coverage ratio.
  • The company is declaring repeated profits, but not declaring dividend pay-outs.

STRENGTHS –

  • Rising net cash flow and cash from operating activities.
  • Company reducing debt.

WEAKNESS –

  • High interest payments as compared to earnings.
  • Annual net profit declining from the last 2 years.

21/08/’19: Rs. 81.25

 

  • VOITH PAPER FABRICS INDIA LIMITED:
  • Current Price: Rs. 1040

Voith Paper Fabrics India Limited is engaged in manufacturing of industrial felts. The Company supplies a range of paper machine clothing (industrial felts) for pulp, paper and paperboard, and fiber-cement industries. The Company’s products include Forming Fabric, which are available in a range of drainage, fiber support and permeability combinations. The Company’s plant is located in Faridabad, Haryana, Delhi National Capital Region (NCR), India. The Company is a subsidiary of VP Auslandsbeteiligungen GmbH. The Company’s ultimate holding company is Voith Paper Holding GmbH & Co. KG.

  • Technical rating indicates a neutral trend.
  • Exponential moving averages indicate a bullish trend, a correction can be expected.
  • June ’20 Net sales was recorded at Rs. 23.09 crore, down 9.16% YoY.
  • Net profit recorded was 4.55%.
  • Company is virtually debt free.
  • Company has a low return on equity of 10.84% for the last 3 years.

STRENGTHS –

  • Annual net profits improving since the last 2 years.
  • Company with no debt.

WEAKNESS –

  • Decline in net profit with falling profit margin.
  • Declining revenue every quarter since the last 2 quarters.

21/08/’19: Rs. 764.05

 

 

  • ZODIAC CLOTHING COMPANY LIMITED:
  • Current Price: Rs. 117.15

Zodiac Clothing Company Limited is engaged in the business of clothing and clothing accessories. The Company operates through two segments: Business of Clothing, and Clothing Accessories and Investment. Its brands include ZODIAC, Z3 and ZOD! Its ZODIAC products.  Its subsidiaries include Zodiac Finsec and Holdings Ltd., Zodiac Clothing Co. S.A. (Switzerland), Zodiac Clothing Co. (UAE) LLC, Zodiac Clothing Company Inc. and Zodiac Properties Limited. Its geographical segments are India and Rest of the World.

  • Technical rating indicated a bearish trend.
  • Moving average crossovers indicate a neutral trend.
  • March ’20 Net sales recorded was Rs. 42.95 crore.
  • Net loss recorded was 6.81%.
  • Stock price was trading at 1.02 times of its book value.
  • The company has delivered a poor growth of -13.36% over the past 5 years.

STRENGTHS –

  • Company with low debt.
  • Company with zero promoter pledge.

WEAKNESS –

  • Company with weak financials.
  • The stock price is forming a bearish reversal pattern.

21/08/’19: Rs. 190.20

ARTICLE BY:

VRIDHI BHAGNARI.

CONTACT DETAILS: [email protected]