KPR Mill surges 15%, hits 52-week high on good Q2 results, capex plan

The company said enquiries from the current clientele as well as from the new markets are much encouraging

Shares of KPR Mill hit a fresh 52-week high of Rs 783, ralling 15 per cent on the BSE in the intra-day trade, on Wednesday after the company reported consolidated net profit of Rs 113 crore in September quarter (Q2FY21), as against Rs 60 crore in June quarter of FY21. The textiles company had clocked a profit of Rs 109 crore in the year-ago quarter.

Revenue from operations grew 74 per cent sequentially to Rs 906 crore as against Rs 522 crore reported in Q1FY21. Ebitda (earnings before interest, taxes, depreciation, and amortisation) margin, meanwhile, stood at 20.1 per cent, as compared to 22.21 per cent in June quarter and 21.31 per cent in the previous year quarter.

Enquiries, according to the management, from the current clientele as well as from the new markets are much encouraging and "there exists a bright prospects to be explored aggressively focusing on the US and other potential markets".

"In order to cater to the growing market demand and towards stepping up of efforts tapping the potential markets, KPR is venturing into expansion of its garment segment by establishing a new garment factory with 42 million garments per annum at an estimated project cost of Rs 250 crore," it said.

Among the emerging markets, India was quickly becoming a preferred destination for international apparel brands. Indian apparel market was calculated to grow at a CAGR of 13 per cent. There are several ingrained factors such as the industry being independent and self-reliant; availability of resources ensuring competitive advantage etc.

Initially, due to the coronavirus outbreak, market scenarios had changed for the Indian exporters. This was because European customers, who were traditionally sourcing from China, started discussions with Indian exporters for new orders. But ever since the Corona virus started spreading to Europe, things have turned upside down, KPR Mill said in 2019-20 annual report.

In the past three months, the stock of KPR Mill has outperformed the market by zooming 75 per cent, as compared to 5 per cent rise in the S&P BSE Sensex.

At 10:17 am, the stock was up 12 per cent at Rs 758, as against 0.11 per cent decline in the S&P BSE Sensex. The counter witnessed huge trading volumes with a combined 360,000 equity shares changing hands on the NSE and BSE till the time of writing of this report. On an average, a combined sub-100,000 shares have traded on both the exchanges in the past one week.