Corporate Update | Market Reports

Textile Stock Weekly Analysis

Published: August 12, 2020

Author: G.Thulessiraman

India is among the world’s largest producers of Textiles and Apparel. The textiles and apparel industry in India are the second-largest employer in the country providing employment to 45 million people. India has become the second-largest manufacturer of Personal Protective Equipment (PPE) in the world. More than 600 companies in India are certified to produce PPEs today. This industry is expected to be globally worth $92.5 bn by 2025, up from $52.7 bn in 2019.

FDIs in the textile industry have reached up to $3.4 bn in 2020. The textile and apparels industry in India have strengths across the entire value chain from yarn, fiber, fabric to apparel. The industry is highly diversified from traditional hand loom, handicrafts, wool and skin products to organized textile industry. The organized textile industry is characterized by the use of capital-intensive technology for mass production of textile products and includes spinning, weaving, processing and apparel manufacturing.

COMPANY’S NAME, PROFILE, NEWS, UPDATES & CURRENT PRICE:

(Current prices are as per the closing prices of 07/08/’20)

BANSWARA SYNTEX LIMITED:
Current price: Rs. 66.05

Banswara Syntex Limited is a holding company. The Company is engaged in the production of textile products. The Company manufactures and markets spun synthetic blended yarn, cotton spun yarn, wool and wool mix yarn, spun synthetic and worsted fabrics, cotton and linen fabrics besides ready-made garments. The Company also produces shirting and technical fabrics.

March ’20 Net sales recorded was Rs. 267.36 crore, down 18.84% YoY.
Technical rating and Exponential moving average crossovers are bearish.
Technical indicators indicate a neutral trend.
Net profit recorded was 2.56%.
Company has reduced its debt.
Company share price is being traded at 0.33% of its book value.
Company’s cost of borrowing seems higher.
The company has delivered a poor rate of growth as low as 2.14% in the last 3 years.

STRENGTHS –

Company with zero promoter pledge.
Company’s net profits increasing for the last 2 years.

WEAKNESS –

Declining revenue since the last 2 quarters.

07/08/’19- Rs. 57.80

DOLLAR INDUSTRIES LIMITED:
Current price: Rs. 128.85

DOLLAR INDUSTRIES LIMITED is located in West Bengal, India and is part of the Apparel Manufacturing Industry. dollar industries limited has 615 employees across all of its locations. There are 9 companies in the dollar industries limited corporate family.

March ’20 Net sales recorded was Rs. 237.67 crore, down 20.19% YoY.
Net profit recorded was 13.32%.
Exponential Moving Average and technical indicators indicate a neutral trend.
Company has delivered a good profit growth of 40.57% Compound Annual Growth Rate (CAGR) over the last 5 years.
A poor growth of 9.52% has been recorded over the last 5 years.

STRENGTHS –

Company with zero promoter pledge.

WEAKNESS –

Mutual Fund investors have decreased their holdings here.
DE-growth in Revenue and Profit.

07/08/’19- Rs. 206.10

INDO COUNT INDUSTRIES LIMITED:
Current Price: Rs. 71.35

Indo Count Industries Limited is an India-based home textile company engaged in the activity of manufacture of textile products. The Company is involved in the manufacture of bedding, quilts, pillows, sleeping bags and others, and preparation and spinning of cotton fibers, including blended cotton. The Company operates as an end-to-end bedding provider.

Technical rating indicates a very bullish trend.
March ’20 Net sales recorded was Rs. 400.25 crore, down 0.33% YoY.
Net profit recorded was 8.25%.
Community sentiments give a clear sign of 100% BUY.
The company has delivered a poor growth of 3.91% over the past 5 years.
Company has a low return on equity of 11.45% for the last 3 years.

STRENGTHS –

Book value per share increasing for the past 2 years.
Stock gained more than 20% in 1 month.

WEAKNESS –

Inefficient use of shareholder funds- Return on equity declining for the last 2 years.
Decline in Net profit with falling profit margin (QoQ).

OPPORTUNITIES –

Relative Strength Index indicating price strength.

07/08/’19- Rs.35.45

JINDAL WORLDWIDE INDUSTRIES LIMITED:
Current Price: Rs. 45

Jindal Worldwide Limited is engaged in weaving, manufacturing and finishing of textiles. The Company is also engaged in the business of manufacturing and dealing in Denim and other textile activities. It processes approximately 50 million meters of fabric each year. It provides wider and narrow width fabrics with a capacity of 30 million meters per annum.

Technical rating indicates a neutral trend.
Exponential moving average are bullish.
On August 05^th, the stock price closed below its 150 EMA at Rs. 44.58
Research report suggests to buy the stock at the breakout price of Rs. 50.5
Company has low interest coverage ratio.

STRENGTHS –

Increasing revenue every quarter since the last 2 quarters.

WEAKNESS –

Inefficient use of assets to generate profits- Return on Assets have been declining since the last 2 years.
Book value per share deteriorating since the last 2 years.

07/08/’19- Rs. 67.05

MAFATLAL INDUSTRIES LIMITED:
Current Price: Rs. 88.20

Mafatlal Industries Limited is an India-based holding company. The Company operates in textile segment with Textiles and Denim business units. The Company operates in both, the business to business (B2B) and the business to consumer (B2C)/retail sector. The Company provides polyester cotton and approximately 100% cotton white shirting business, and cotton and viscose prints and high twist cotton voile’s.

Technical rating indicates a very bearish trend.
March ’20 Net sales was recorded at Rs. 208.75 crore, down 15.41% YoY.
Net loss incurred of 4.07%.
Stock is trading at 0.43 times of its book value.
Company has been giving out dividend at a health rate of 20.29%.

STRENGTHS –

Growth in quarterly net profit with increasing profit margin (YoY).

WEAKNESS –

Poor cash generated from core business.
Declining cash flow operations for the last 2 years.
Company with weak financials.

07/08/’19- Rs. 75

MONTE CARLO FASHION LIMITED:
Current Price: Rs. 160.30

Monte Carlo Fashions Limited is engaged in manufacturing of all types of textile garments and clothing accessories. The Company is involved in manufacturing of designer woolen/cotton ready-made apparels under its MONTE CARLO brand. Its woolen products include sweaters and cardigans. Its cotton knitted garments include T-Shirts and Track Suits. It operates over three manufacturing facilities in Ludhiana, Punjab.

Technical rating indicates a neutral trend.
Exponential moving averages indicate a bullish trend.
Community sentiments indicate the signal of 100% BUY.
March ’20 Net sales recorded was Rs. 109.47 crore, up 14.29%.
On August 06th, the stock price closes above its 30-day moving EMA.
Net loss recorded was 10.22%.
On April 21^st, as the industry began its operations in Ludhiana, the stock price jumped 20% in intraday trade.
The company has delivered a good profit growth of 40.57% CAGR over the last 5 years.

STRENGTHS –

Rising net cash flow and cash from operating activity.
Company with low debt.

WEAKNESS –

Decline in net profit with falling profit margin.

07/08/’19- Rs. 258.05

PAGE INDUSTRIES:
Current price: Rs. 19,011.85

Page Industries Limited is engaged in the business of manufacturing and trading of garments. The Company offers knitted garments. The Company offers a range of products for men, women and children. It operates its own online store www.jockeyindia.com. Its plants are located in Bangalore, Hassan and Mysore, among others.

Technical rating indicates a bearish trend.
Exponential moving average crossovers indicate a neutral trend.
Community sentiments give a mixed signal of 67% BUY, and 33% SELL.
On August 06^th, the stock price crossed its 50-day EMA of Rs. 19494.56
March ’20 Net sales recorded was Rs. 541.26 crore, down 10.96%.
The company declared a good amount of dividend of about Rs. 161 per share.
Stock is trading at 26.34 times of its book value.

STRENGTHS –

Company with zero promoter pledge.
FII/FPI’s or institutions have increased their stake in the company.

WEAKNESS –

Declining profits since the last 2 quarters.
Declining operation profit margin and net profits.

07/08/’19- Rs. 18402.45

SANGAM INDIA LIMITED:
Current price: Rs. 48.10

Sangam (India) Limited is an India-based textile company. The Company manufactures polyester viscose (PV) yarn. The Company’s segments include Domestic and Export. It has a spinning capacity of approximately 225,168 spindles and over 3,128 rotors, and weaving capacity of approximately 483 looms. The Company’s manufacturing facilities are located in Bhilwara, Rajasthan.

Technical rating indicates a bullish trend.
Moving average crossovers indicate a neutral trend.
On August 06^th, the stock price closed below its 50-day EMA at Rs. 48.60
Sales and net profit recorded was Rs. 401.50 crore and 3.49% respectively.
Stock is being traded at 0.36% times of its book value.
Company has maintained a health dividend pay-out of 17.53%.

STRENGTHS –

The company has been building a Bullish reversal pattern.
Book value per share improving for the last 2 years.

WEAKNESS –

Decline in net profits (QoQ).
Inefficient use of assets to generate profits.

07/08/’19- Rs. 38.50

SPORTKING INDIA LIMITED:
Current Price: Rs. 255

Sportking India Limited is an India-based textile company. The Company is engaged in manufacturing of cotton, cotton polyester blended, and acrylic-blended yarn in grey and dyed forms. The Company has an installed capacity of over 204,600 spindles. The Company’s manufacturing facilities are located in Ludhiana and Bathinda in Punjab.

Technical rating indicates a bullish trend.
March ’20 Net sales recorded was Rs. 324.19 crore, up 2.4% YoY.
Net profit was 1.24%.
Moving average crossovers are neutral.
Stock is trading at 0.35% times of its book value.
Company is not paying out dividend.

STRENGTHS –

Book value per share improving for the last 2 years.
Company has zero promoter pledge.

WEAKNESS –

Declining net cash flow- company is not being able to generate net cash.
Declining revenue every quarter for the last 2 quarters.

07/08/’19- Rs. 255

VISHAL FABRICS LIMITED:
Current Price: Rs. 283.50

Vishal Fabrics Limited is engaged in the manufacturing of textile products. The Company is also engaged in finishing of cotton and blended cotton textiles. It is engaged in the business of dyeing, printing and processing of fabrics of its own and also on job work basis. It offers a range of fabrics, such as 100% cotton, polyester and various blends.