Should I invest in NIFTY Textile stocks?
The Textiles and apparel sector stocks have started to rally after a relative slump over the last year. The recent FTAs signed with a few countries and a favorable export environment has generated buyer interest again. Big money seems to be accumulating these stocks and the rally in the stocks of Vardhman, Nitin Spinners, Trident, and Kitex is the proof. While Nitin Spinners has shown a phenomenal performance, the Trident share price has also seen a sustained growth.
Let’s analyses the textile sector a little and see the major gainers and losers in the industry.
A look at Raymond’s share price
The Raymond share price hasn’t seen too much movement in the past year, with the stock giving a modest 2.84% return last year. The apparel giant made a net profit of Rs 159.78 crores in the last quarter so the fundamentals still look strong. The share holding pattern and the FII interest in the stock has raised interest among buyers once again. Some analysts have given a strong buy recommendation on the stock as its financial strength looks good.
Here’s a look at the fundamentals of Raymond:
- Market Capitalization: Rs 11,817.84 Cr
- LTP (2nd Feb 2024): Rs 1773.80
- 52-week high: Rs 2240
- P/E Ratio: 7.95
- FII Holding: 14.39% as of 31st December 2023
- Promoter Holding: 49.11%
- Public Holding: 50.86%
A look at Trident’s share price
The rise in Trident share price looks promising and a report by Money control says that the stock could give a return as high as 26% in the near term. The impressive volumes combined over NSE and BSE highlights a huge buyer’s interest in the stock. The company is the 3rd largest manufacturer of yarns in India and it has expanded to the power sector as well. Trident seems well-poised to give a good yield in the future and investors are bullish on the stock in the short and long-term. It is trading below Rs 50 right now and has the potential to be a multibagger.
- Market Capitalization: Rs 23,849.07 Cr
- LTP (2nd Feb 2024): Rs 46.78
- 52-Week high: Rs 52.85
- P/E Ratio: 50.65
- Dividend Yield: 1.54%
- FII Holding: 2.47%
- Promoter Holding: 73.19%
- Public Holding: 22.96%
Other competitors in the textile and apparel industry
Apart from Raymond and Trident, there are some other promising stocks in the textile industry. Let’s throw some light on these stocks here:
- Nitin Spinners
Nitin Spinners has been a major gainer in the last year and the stock has given impressive returns to investors. The company makes impeccable cotton and blended yarns and is emerging as a quality supplier.
- Vardhman Textiles Ltd.
Vardhman Industries produces quality fabric and has emerged as a reliable supplier of yarns. The company has grown at an impressive CAGR of 9% and analysts are seeing a good potential yield for the stock.
- Alok Industries
Alok Industries has been able to generate steady net profit for a while and has shown the highest recovery from its 52-week low price. This shows there’s still charge left in the stock and it could give a good rally in 2024.
- Sangam India
The stock of Sangam India zoomed to 19% last June and has given enviable returns to shareholders. The cotton, PV-dyed yarn, and ready-to-stitch fabric maker is expected to touch the Rs 4000 crore revenue mark in 2025.
- Kitex Garments
This Kerala-based garment manufacturer has seen magnificent year-on-year growth. The quarterly financial figures in December 2023 – net sales (Rs 164.13 crore), net profit (Rs 21 Crore), and the EBITDA figure (Rs 41.11 crore) – have all seen exponential growth.
Textile exports: Reason to invest in textile and apparel stocks in 2024
The FTA between India and the UK recently has brought hopes to the textile sector as the sector is looking to make profitable exports. The sector is the second-largest employer in the country and has a sectoral valuation of about $US 50 billion. It generates much more in revenue and employs about 5 crore people. The growth of the Indian economy depends a lot on this sector. The government is also looking to facilitate international trade in Indian textiles to benefit the sector.
The sector is about to see a spurt in export volumes in the coming years and institutional buyers are eager to buy these stocks. This presents a great opportunity for individual buyers as well.
Final Thoughts
The textile sector is well set as the major players in the textile manufacturing sector have shown promising growth. The outlook for the textiles and apparel sector remains positive and the high volumes are just a small indicator of that sentiment. Keep an eye on major players in the segment and update yourself of the Raymond share price. Investing in the textile sector could be a major wealth creator in the next few years.
