Kitex Garments surges 23% in three days on strong revenue growth in Q3

Kitex Garments reported a strong 69 per cent year on year growth in total revenues at Rs 205 crore in October-December quarter.

Shares of Kitex Garments hit a 52-week high of Rs 240.80 after rallying 9 per cent on the BSE in Thursday’s intra-day trade in an otherwise weak market. This came on the back of heavy volumes. The stock was trading at its highest level since May 2018.

In the past three trading days, the stock of the textile - infant/kids apparel manufacturing company has zoomed 23 per cent after it reported a strong 69 per cent year on year (YoY) growth in total revenues at Rs 205 crore for October-December quarter (Q3FY22). It had recorded total revenues of Rs 121 crore in the same quarter last fiscal.

“Total revenue for the 3 quarters (April-December) of FY2021-22 stood at Rs 547 crore as against Rs 353 crore in the same period last year,” Kitex Garments said in exchange filing on Tuesday. 

At 01:12 pm, the stock was trading 8 per cent higher at Rs 237.20, as compared to a 1.2 per cent decline in the S&P BSE Sensex. The trading volumes on the counter jumped over four-fold today and combined 4.6 million equity shares changed hands on the NSE and BSE.

In the past six months, the stock has zoomed 120 per cent, against a 12.5 per cent rise in the benchmark index. For the first half (April-September) of FY22, Kitex Garments had reported 52 per cent YoY jump in its consolidated net profit at Rs 46.23 crore. It had posted net profit of Rs 54.27 crore in entire previous fiscal (FY21).

In October 2021, the company proposed investment in Kakatiya Mega Textile Park, Warangal for Rs 1,113 crore and in Industrial Park, Sitarampur, Rangareddy District for Rs 1,293 crore.

It also proposed to incorporate a subsidiary company in the state of Telangana with an initial investment of Rs 750 crore, wherein 70 per cent of the initial investment will be invested by the company and balance 30 per cent will be invested by Kitex Childrenswear Ltd.

Since the company is in infantswear business, the management expects that the business will grow at a good pace and there is also a possibility of getting a new good order from existing/ new buyers from across the globe considering the trade war between the US and China.

“With increase in infants' population and considering various factors like growing trend of nuclear family system, increased spending on children and better focus on this segment by organised players, the infantswear segment will grow in coming years,” Kitex Garments said in its FY21 annual report.