Weekly Analysis of Textile stocks

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COMPANY’S NAME,  DETAILS & UPDATES:

(CURRENT PRICES ARE THE CLOSING PRICES AS ON 18th September, ’20.)

  • A K Spintex:
  • Current price: Rs. 21

A.K.Spintex Limited is an India-based company, which is engaged in manmade fabric processing activities. The Company is mainly engaged in the processing of grey fabric. A.K.Spintex Limited operates as a textile company. The Company offers manufacturing and processing of fabrics. A.K. Spintex serves customers in India.

  • Technical rating indicates a neutral trend.
  • Exponential moving average indicates a bullish trend, a correction can be expected.
  • June ’20 Net sales was recorded at Rs. 3.10 crores, down 81.29% YoY.
  • Company has a low return on equity of about 9.25% for the last 3 years.
  • The company is declaring profits but not paying out dividend.
  • Stock is trading at 0.50 times of its book value.

STRENGTHS –

  • Company has reduced debt.
  • Company with zero promoter pledge.

WEAKNESS –

  • Major fall in TTM net profit.
  • Declining revenue every quarter since the last 2 quarters.

18/09/’19- Rs. 13.87

 

  • BETEX:
  • Current price: Rs. 18.50

Betex India Limited provides textile processing services. The Company specializes in dyeing, washing, unloading, heat setting, folding, packing, scouring, wrapping, and printing solutions for art silk cloth and polyester fabrics. Betex India serves customers in India. The company is mainly engaged in job processing work on grey fabrics through its dying and printing units. In the year 2007 Company has installed 1.25 MW Wind Mill Project at Kutch, Gujarat.

  • Technical rating and exponential moving averages indicate a bearish trend.
  • Moving average crossovers indicate a bullish trend.
  • The company is declaring repeated profit but not paying out dividend.
  • Company has a low return on equity of about 3.49%
  • The company has delivered a poor growth of 5.28% over the past 5 years.

STRENGTHS –

  • Company with zero promoter pledge.
  • Stock is trading at 0.12 times of its book value.

WEAKNESS –

  • Degrowth in quarterly revenue and profit in recent results.
  • Degrowth in revenue and profit.

17/09/’19- Rs. 21.35

  • HP COTTON TEXTILE MILLS LTD:
  • Current price: Rs. 23.30

H.P. Cotton Textile Mills Limited is an India-based company, which is engaged in manufacturing of thread. The Company also exports cotton specialty yarns and cotton sewing threads. The Company produces two types of threads, including sewing threads and hosiery yarn.  Its plant includes combing integrated with auto-coners, gas-singeing, hank-winding, and finishing facility for balling and spooling, among others.

  • Technical rating indicates a very bullish trend.
  • March ’20 Net sales was recorded at Rs. 24.26 crores, down 17.62% YoY.
  • Stock is trading at 0.47 times of its book value.
  • Company’s cost of borrowing seems high.
  • Company has a low return on equity of around 0.13% for the last 3 years.

STRENGTHS –

  • Growth in net profit with increasing profit margins.
  • Increasing profits every quarter since the last 4 quarters.

WEAKNESS –

  • Company with weak financials.
  • Company has delivered a poor growth of -2.29% over the past 5 years.

18/09/’19- Rs. 19.65

 

  • MARIS SPINNERS LIMITED:
  • Current price: Rs. 19.36

Maris Spinners Limited was originally incorporated as a Private Limited company on 18.9.1979. The Company became a deemed Public Limited Company under Section 43A(1A) of the Companies Act, 1956 from 1.7.1994. The Company presently manufactures 100% cotton carded yarn of counts 30s, and 40s for weaving, knitting and handlooms. The Company’s spinning unit is located in Kattemalalavadi village, Hunsur taluk, Mysore District, Karnataka. Maria Spinners Limited has a sound track record of productivity, and has been producing high quality yarn for the domestic market.

  • Technical rating indicates a very bullish trend.
  • June ’20 Net sales was recorded at Rs. 5.29 crores, down 83.18% YoY.
  • Net loss of 2% was recorded.
  • Company has a low return on equity of 1.51% for the last 3 years.
  • Company has low interest coverage ratio.

STRENGTHS –

  • Stock gained more than 20% of its value in 1 month.
  • Company is expected to give a good quarter.

WEAKNESS –

  • High interest payments compared to earnings.
  • Declining operating profit margin and net profits.

18/09/’19- Rs. 40

 

  • PRECOT MERIDIAN LIMITED:
  • Current price: Rs. 37.90

Precot Meridian Limited, formerly Precot Mills, is primarily engaged in the business of textiles. The Company has considered geographical segments as its primary segments, which are domestic and export sales. Its principal products/services include cotton yarn. The products manufactured by the Company fall under two categories: yarns and threads, and health and hygiene care.  It has spinning units at Kerala, Andhra Pradesh and Tamil Nadu; dyeing units at Tamil Nadu and Karnataka; open-end (OE) spinning unit at Kerala, and doubling and gassing units at Andhra Pradesh and Tamil Nadu.

  • Technical rating indicates a very bullish trend.
  • June ’20 Sales was recorded at Rs. 88 crores.
  • Net loss of 11% was recorded.
  • Promoters have pledged their 83.42% of their holding.
  • The company has delivered a poor growth of -0.56% over the past 5 years.

STRENGTHS –

  • The stock price is trending above its short, medium- and long-term moving averages and thus has built a strong momentum.
  • The stock price gained more than 20% of its value in 1 month.

WEAKNESS –

  • Company with high promoter pledge.
  • Fall in quarterly revenue and net profit.

18/09/’19- Rs. 30

 

  • SURYAAMBA SPIN:
  • Current price: Rs. 47.15

Suryaamba Spinning Mills Limited is engaged in offering polyester yarn and polyester/viscose blended yarn. The Company is a producer of synthetic blended yarn. The Company produces 100% polyester, viscose and Melange with counts ranging from 08s to 60s. The Company has a manufacturing unit with a total installed capacity of approximately 43,630 spindles with a production capacity of over 50 metric tons per day. The unit is located at Mouza-Nayakund, near Ramtek in the state of Maharashtra. The Company offers yarn products for home and industrial textile applications.

  • Technical rating indicates a very bearish trend.
  • Moving average crossovers indicates a neutral trend.
  • March ’20 Net sales was recorded at Rs. 36.24 crores, down 17.97% YoY.
  • Company has a low return on equity of around 10.93% for the last 3 years.
  • Company has low interest coverage ratio.

STRENGTHS –

  • Annual net profits increasing since the last 2 years.
  • Stock is trading at 0.40% of its book value.

WEAKNESS –

  • Fall in quarterly revenue and net profit.
  • Declining profits every quarter since the last 2 quarter.

18/09/’19- Rs. 55.40

 

  • VIRAT INDUSTRIES LIMITED:
  • Current price: Rs. 30.65

Virat Industries Limited is engaged in the manufacturing and exporting of dress and sport socks for men, ladies and children. The Company also manufactures football socks for clubs of Europe. The Company’s products/services are knitted socks. The Company’s socks are manufactured in cotton, cotton/viscose, wool, acrylic, wool/cashmere, wool/silk and cotton/silk. It also develops special yarn on request. The Company’s single cylinder machines produce, jacquard, plain, fillet, motif and embroidery.  The Company has operations in the United Kingdom, Switzerland, the United Arab Emirates (UAE), India and Rest of the World.

  • Technical rating indicates a bullish trend.
  • Moving average crossovers indicate a neutral trend, a correction can be expected.
  • June ’20 net sales was recorded at Rs. 2.75 crores, down 59.19% YoY.
  • Company is virtually debt free.
  • Company has a low return on equity of around 9.30% over the last 3 years.

STRENGTHS –

  • Company with zero promoter pledge.
  • Stock is trading at 0.69% of its book value.

WEAKNESS –

  • The stock price is forming a bearish reversal pattern.
  • Degrowth in revenue and profit.

18/09/’19- Rs. 46.75

 

  • WIRES AND FABRIKS (SA) LTD:
  • Current price: Rs. 49

Wires and Fabriks (S.A.) Limited is engaged in the manufacture of technical textiles and chemicals for paper industry. The Company is also engaged in wind power generation. Its segments include Paper Mill Products and Wind Power. The Paper Mill Products segment includes the technical textiles, chemicals and equipment mainly for paper mills. The Wind Power segment includes wind power. Its geographical segments include India, which includes sales to customers located within India and earnings in India.

  • Technical rating indicates a bearish trend.
  • Moving average crossovers indicate a neutral trend.
  • March ’20 Net sales was recorded at Rs. 21.02 crores, down 26.74% YoY.
  • Company has a low return on equity of 2.90% over the last 3 years.
  • Company has low interest coverage ratio.

STRENGTHS –

  • Growth in quarterly net profit with increasing profit margins.
  • Annual net profits increasing since the last 2 years.

WEAKNESS –

  • The stock price is trending below its short, medium-and-long-term moving averages and thus has a weak momentum.
  • Declining revenue every quarter since the last 2 quarters.

17/09/’19- Rs. 75.55

 

  • ZENITH EXPORTS:
  • Current price: Rs. 41.55

Zenith Exports Limited is an India-based company engaged in spinning, dyeing, weaving and finishing various kinds of fabrics. The Company offers fabrics, made ups and accessories to the global furnishings and fashion trades. It designs and manufactures a range of silks, velvets, damasks, embroideries, weaves and sheers. The Company’s products include leather gloves, silk fabrics and cotton yarn. Its segments include Trading Division, Weaving Division and Spinning Division.

  • Technical rating indicates a neutral trend.
  • Exponential moving average indicate a bullish trend.
  • The stock price closed above its 200-day moving average on 18th September ’20 at the price of Rs. 41.43
  • March ’20 Net sales was recorded at Rs. 22.16 crores, down 7.82% YoY.
  • The company has delivered a poor growth of -20.83% over the past 5 years.

STRENGTHS –

  • Growth in quarterly net profit with increasing profit margins.
  • Company with reduced debt.

WEAKNESS –

  • Company with weak financials.
  • Company has low interest coverage ratio.

18/09/’19- Rs. 46.90

 

  • ZENITH FIBRES:
  • Current price: Rs. 36.10

Zenith Fibers Limited is an India-based company, which manufactures a range of polypropylene staple fiber (PPSF). The Company operates through Manmade Fiber segment. The Company is also involved in marketing of polypropylene (PP) spun and DREF-2 yarn.  It offers products for domestic, as well as in the international markets. It offers products to the sectors, including automobile, chemicals, infrastructure, building construction and drug or pharmaceutical. It has a production capacity of 8,400 million tons per annum (MTPA). The Company has its manufacturing plant at Tundav, near Baroda.

  • Technical rating indicates a neutral trend.
  • Moving average crossovers indicate a bullish trend.
  • March ’20 Net sales was recorded at Rs. 6.58 crores, down 18.42% YoY.
  • Promoter holding has decreased of up to 4.15% in the past 3 years.
  • Debtor days have increased from 19.27 days to 35.64 days.

STRENGTHS –

  • Company with no debt.
  • Company with zero promoter pledge.

WEAKNESS –

  • Major fall in TTM profit.
  • Annual net profit declining since the last 2 years.

18/09/’19- Rs. 44

ARTICLE BY:

VRIDHI BHAGNARI.

CONTACT DETAILS: [email protected]