TIME TO INVEST IN TEXTILE IN THE BULL MARKET

With the rising market where by Nifty advances towards the recent high of high of 8995 on 8th September’16 soon to touch the 9000 mark, it’s time to invest in textile sector.

Symbol	LTP	June EPS	Inst	PE Ratio	DE Equity	Pledge	EPS Growth	MF	Return from Budget
CENTENKA	282.9	10.3	111	8	0	0	15.20%	36	107
TRENT	215.9	7	125	8	0	0	36.90%	37	78
HIMATSEIDE	270.85	4.6	97	16	1	0	6.20%	21	75
GANECOS	232.4	3	12	17	1	26	-16.30%	8	67
KITEX	478.85	4.4	44	20	0	0	-53.50%	2	36
VTL	1010.1	29.3	204	10	1	0	14.70%	58	35
NDL	127.55	3.4	10	10	2	27	-3.90%	0	34
TRIDENT	56.25	1.6	36	11	2	0	47.70%	8	30
SPAL*	351.5	9.6	0	11	2	0	0.00%	0	New listing

  

This sector started performing post Budget as: 

• 100% FDI is allowed under the automatic route in the textile sector; investment is subject to all applicable regulations and laws.
• Government introduced the scheme for integrated Textile Parks, which will provide world class infrastructure to the sector. Till date 57 textile parks have been started with the investment of Rs. 6000 crs. 25 more textile park to open by 2017.
• Training to be provided to more than 15 lakhs people under integrated Skill Development scheme. 

Century Enka is the lowest PE share trading at a PE of 8 in spite the share price has gone up 95% from recent low of 145 in March to 282. What makes it a leader in this sector is that it is a Zero debt company and the earning has been improving every quarter from last 4 quarters. The forward PE of the company is 6.84. Century Enka Limited is a Pune based company. The products manufactured by Century Enka Limited are Polyester Filament Yarn, Nylon Filament Yarn, Polyester POY, Polyester and Nylon Chips of industrial and fabric grade and Nylon Industrial Yarn and Nylon Tyre Cord Fabrics. The company operates in one segment i.e. Synthetic yarn.  Centur Enka has 111 institutions invested in this share out of which 36 as Mutual Funds. 

Trent is the next best performing share in this sector trading at low PE of 8 and has moved 78% form recent low of 140 in March. Trent Limited is a part of Tata Group retail operations company that owns and manages a number of retail chains in India, such as Westside (lifestyle retail stores), Star Bazaar (a hypermarket chain), Landmark ( a books and music chain), and Fashion Yatra ( a complete familyfashion store ). This share has given correction from recent high of 250 and is trading at 215. Tata Sons will increase its stake in Trent Ltd by acquiring 1.17% to 27.74% as part of restructuring of its investment portfolio. It will buy 3.87 lakh share of Trent from one Af-Taab Investment company.<br

The Himatsingka is an India based vertically integrated Home Textile Company. It focuses on the manufacturing, retailing and distribution of Home Textile products. They operate in home textile business segment. The company’s product portfolio includes bed Linen, drapery & upholstery and Silk & Blended yarn. Recently from low of 144 this share made a life time high of 297.

Ganesh Ecoshpere is an India based company. The company is into the business of manufacturing Recycled Polyester staple Fibre (Green Fibre) through recycling of post-consumer pet bottle waste. The company is engaged in only one business segment i.e. Synthetic Yarn & Fibre. The products of the company find application in geotextiles, carpets, mattresses, wallpaper, teabags, acoustic materials and many more. The company has a steady topline and bottom line with Revenue and earning maintained at par in all the quarters.

Kitex is a high PE company in the sector trading at a PE of 20. Kitex is engaged in the business of manufacturing and exporting of Garments. The company manufactures different type of garments like jacket, shirt, pants, inner wear and etc. The company operates in two business segment garment and fabrics. It is a low beta share. The earning dropped from 9.45 per share to 4.39 per share in June quarter.

Vardhaman Textile has the highest number of institutions and Mutual Funds invested in this share. This company comes under the umbrella of the Vardhman group. The company operates in six business segments- yarns, sewing thread, steel, fabric, acrylic fiber, garment and other business. This share has not shown much price movement since Budget and is available at correction from recent high of 1120. Earning of the company has consistently increased in last 4 quarters from Rs 20 per share to Rs 29.26 per share making the forward PE of the share as 8.3 and a good bet in this sector.

NDL, Nandan Denim Ltd is an India based company engaged in the manufacturing of gray cotton fabrics, khakhis and denims. The products of the company include denims, bottom weight fabrics, twills, stretch, bull denim, broken twills. This share has promoter holding pledge of 27%. There has not been any growth in the earning in NDL in last 4 quarters. One can book profit in this share.

Trident is engaged in the business of manufacturing agro based paper, yarn, Terry towels and sulphuric acid. The company also has a captive power plant. The company operates in two business segment textile and paper. This share showed good price movement as there was news of Target group shifting its contract from Welspun India to Trident. Trident is a low PE share with growth in Earning and is trading at a good buy level of 55.

History shows that market always rewards fundamentally good shares so Be Invested in the Best shares and avoid share like Kitex, Gancos and NDL.