Corporate Update | Market Reports

Weekly Analysis of Textile stocks

Published: September 18, 2020

Author: G.Thulessiraman

The textile industry is the industry which involves the sections like research, design, development, manufacturing and distribution of textiles, fabrics and clothing. The textile industry is a global phenomenon comprised of every business involved in the developing, producing, manufacturing, and distribution of textiles.

(Current prices are the closing prices as on 15th September 2020.)

ASHIMA LIMTIED:
Current price: Rs. 8.55

Ashima Limited is engaged in the business of cotton fabrics. The Company operates through Textiles segment. The Company’s divisions include Denim Division, Spinfab Division and Attires Division. The Company offers a range of cotton textile products, including denims, shirting’s, bottom weights and interlinings. The Company offers its products under ICON and Frank Jefferson brand names.

Technical rating indicates a very bullish trend.
Community sentiments give a clear signal of 100% SELL.
June ’20 sales was recorded at Rs. 8 crores.
Net loss of 6% was recorded.
Stock is trading at 0.49% times of its book value.
The company has delivered a poor growth of 1.04% over the past 5 years.

STRENGTHS –

Stock gained more than 20% of its value in one month.
Company with zero promoter pledge.

WEAKNESS –

Fall in quarterly revenue and net profit.
The stock price is forming a bearish reversal patter.

17/09/’19- Rs. 8.25

AXITA COTTON LIMITED:
Current price: Rs. 42.50

Axita Cotton Limited is an India-based company, which produces cotton bales and cotton seeds. The Company is engaged in producing mainly two varieties of cotton bales. The Company’s cottons are packed in bales form. Its ginning unit separates cotton fibre and cotton seed from Kapas. The Company’s production facility is situated at Kadi in Mahesana, Gujarat.

Technical rating indicates a bearish trend.
The company has a promoter holding of 73.26%
The company is recording repeated profits, but not giving out dividend.
Company has low interest coverage ratio.
The rate at which the company has done borrowings, seems high.

STRENGTHS –

Company with zero promoter pledge.
The book value per share is improving since the last 2 years.

WEAKNESS –

High interest rates paid compared to earnings.
Company not able to efficiently generate net cash.

17/09/’19- Rs. 43.25

GOKALDAS EXPORTS LIMITED:
Current price: Rs.60.65

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. It serves customers in the United States, Europe, Latin America, the Middle East and India. The Company has approximately 30 manufacturing units. It has over 20 equipped manufacturing facilities with a capacity to produce and export approximately 2.5 million garments a month. The Company operates an Export-Oriented Unit, a Domestic Tariff Area Unit and a Special Economic Zone Unit.

The technical rating indicates a very bullish trend.
Community sentiments give a clear signal of 100% BUY.
March ’20 Net sales was recorded at Rs. 355.92 crores, up 8.52% YoY.
Net profit of 5% was recorded.
Cost of borrowing seems high.
The company is declaring repeated profit, but not giving out dividend.

STRENGTHS –

The stock price is trading above its short, medium- and long-term moving averages thus forming a strong momentum.
Annual net profits improving from the last 2 years.

WEAKNESS –

Decline in quarterly net profit with falling profit margins.
Major fall in TTM Net profit.

17/09/’19- Rs. 88.20

LIBAS DESIGNS:
Current Price: Rs. 32.85

The Company was incorporated as Libas Designs Private Limited under the provisions of the Companies Act 1956 vide certificate of incorporation dated November 10, 2004, issued by the Registrar of Companies, Mumbai, Maharashtra. Subsequently, the Company was converted into a public limited company. Libas Designs Limited provides apparel. The Company offers suits, shirts, pants, sarees, gowns, jewelries, belts, gift bags, and cufflinks. Libas Designs serves customers in India.

The technical rating indicates a very bearish trend.
The stock price of this company hit a 52-week low of Rs. 31.10 on 02 September.
March ’20 Sales was recorded of Rs. 7 crores.
Net loss of 1% was recorded.
The promoter holding has decreased of about 11.60 over the last 3 years.

STRENGTHS –

Stock is trading at 1.04 times of its book value.
Company with zero promoter pledge.

WEAKNESS –

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

17/09/’19- Rs. 59.20

LUX INDUSTRIES LIMITED:
Current price: Rs. 1407.10

Lux Industries Limited is an India-based company engaged in the manufacture and sale of knitted apparel, including hosiery. The Company offers various products for men, women and kids. The Company exports products to the whole of Africa and the Middle East, Singapore, Malaysia, Cameroon, Australia and North America. The Company’s manufacturing units are located in Kolkata (West Bengal) and Tirupur, in the state of Tamilnadu.

Technical rating indicates a very bullish trend.
Community sentiments give a direct indicator of 100% BUY.
June ’20 Net sales was recorded at Rs. 244.46 crores, down 6.82% YoY.
Net profit was recorded at 30%
Company has delivered a good profit growth of 22.81% CAGR over the last 5 years.
Promoter holding has decreased of 4.20% over the last 3 years.

STRENGTHS –

FII/FPI or institutions has increased their shareholding.
Growth in operating profit with increase in operating margins.

17/09/’19- Rs. 1160.55

MEERA INDUSTRIES:
Current price: Rs. 39.85

Meera Industries Limited is an India-based company engaged in manufacturing Two for One twisting yarns and textile products. The TFO twisting machines comprises a gear change system for all types of settings. Industrial Thread Twister is widely used for polyester, nylon, and viscose yarn. It offers variety of ring twisting machine, industrial ring twister, ring spinning machine and cotton ring spinning machine. Covering Machine is a fully ceramic pre-take-up roller, which is designed for elastic yarns.

Technical ratings indicate a neutral trend.
Moving average crossovers indicate a bearish trend.
On 4^th September, the stock price hit a 52-week low of Rs. 31
Company is virtually debt free.
Company has been maintaining a healthy dividend pay-out of 19.79%
Promoter holding has decreased by 7.29% over the last 3 years.

STRENGTHS –

Company with zero promoter pledge.
The return on assets of the company has been increasing since the last 2 years.

WEAKNESS –

Company has not been able to generate net cash.
The stock price is trading below its short, medium- and long-term momentum thus forming a weak momentum.

17/09/’19- Rs. 75.25

RSWM LIMITED:
Current price: Rs. 93.40

RSWM Limited is engaged in the manufacturing, spinning, weaving and processing of manmade textile fabrics. The Company is also engaged in cotton spinning and weaving. Its segment includes Yarn, and Fabric & Denim. Its geographical segments include India, Europe, Middle East, America and Other Countries.

Technical rating indicates a very bullish trend.
Community sentiments indicate a clear signal of 100% BUY.
June ’20 Net sales was recorded at Rs. 215.83 crores, down 69.2% YoY.
Net loss of 65% was recorded.
Stock is trading at 0.30 times of its book value.

STRENGTHS –

The stock price is trading above its short, medium- and long-term moving averages thus forming a strong momentum.
Stock gained more than 20% of its value in one month.

WEAKNESS –

High interest payments compared to earnings.
Declining profits every quarter since the last 2 quarters.

17/09/’19- Rs. 122.75

SIYARAM SILK MILLS LIMITED:
Current price: Rs. 143

Siyaram Silk Mills Limited is a holding company. The Company is engaged in manufacturing fabrics and readymade garments. The Company is engaged in the textile business. The Company’s portfolio includes Yarns, Home Furnishing, Retail, Ready to Wear and fabrics. The Company’s products are available at over 1,000 retail and multi brand stores across India. The Company’s weaving facilities are located in Tarapur and Silvassa. The Company manufactures over 60 million meters of fabrics annually.

Technical ratings indicate a bearish trend.
Moving average and moving average crossovers indicate a neutral trend.
The company has been maintaining a healthy dividend pay-out of 31.40%
Company has low interest coverage ratio.
Community sentiments indicate a clear signal of 100% BUY.
On 10^th September, the stock price closed above its 50-day moving average at Rs. 141.82

STRENGTHS –

The promoters are increasing their shareholding.
High dividends with rising dividend yield over last 5 years.

WEAKNESS –

Annual net profit decreasing for the last 2 years.
Inefficient use of assets to generate profits since the last 2 years.

17/09/’19- Rs. 250.05

STOVEC INDUSTRIES LIMITED:
Current price: Rs. 1955

Stovec Industries Limited (Stovec) is an India-based company, which is engaged in the development and production of consumables for their use in textile and graphic printing industry. The Company’s products and services include perforated rotary screens and automatic rotary screen printing machine. The Company has three segments: Textile Consumables and Textile Machinery, Graphics Product and Galvanic. The Company is engaged in the business of printing machines supply, installation and after sales support. Stovec operates in a range of verticals, including textile printing, graphics printing and sugar filtration. The Company offers digital ink and sugar screens. Stovec is a part of SPGPrints Group.

Technical rating indicates a very bearish trend.
Moving average crossovers indicate a neutral trend.
Community sentiments indicate a clear signal of 100% SELL.
June ’20 Net sales was recorded at Rs. 16.84 crores, down 67.15% YoY.
Company has been maintaining a healthy dividend pay-out of 34.62%

STRENGTHS –

Company with zero promoter pledge.
Stock is providing a good dividend yield of 3.03%

WEAKNESS –

Declining profits every quarter since the last 3 quarters.
The stock price is trading below its short, medium and long term thus has a weak momentum.

17/09/’19- Rs. 1812.45

SUTLEJ INDUSTRIES LIMITED:
Current price: Rs. 27.80

Sutlej Textiles and Industries Limited is an integrated textile manufacturing company. The Company is a manufacturer of synthetic staple fibers yarn, man-made fibers blended yarn and cotton yarn, and fabrics. The Company’s two business segments include Yarn consisting of Cotton and Man Made Fibers Yarn, and Fabrics consisting of Home Furnishings and Fabric processing. The Company’s geographical segments include India and outside India. The Company also offers a range of products through home textiles category, which includes Rayon blends, Flax, Linen and Jute.

Technical rating indicates a very bullish trend.
On 10^th September, the stock price closed above its 30-day moving average.
June ’20 Net sales was recorded at Rs. 188.02 crores, down 71.01% YoY.
Net loss of 38% was recorded.
Stock is trading at 0.47 times of its book value.
The company has delivered a poor growth of 4.97% over the past 5 years.

STRENGTHS –

The stock price is trading above its short, medium- and long-term moving averages thus forming a strong momentum.
Stock gained more than 20% of its in one month.

WEAKNESS –