This textile stock has gained 138% in 2 mths; up 1,786% from March 20 lows

Shares of Trident were locked in the 5 per cent upper circuit for the seventh straight day at Rs 57.55, which was also its new high, on the BSE in Friday's intra-day trade in an otherwise weak market on the back of heavy volumes.

The trading volumes on the counter jumped 1.5 times with a combined 78 million equity shares having changed hands on the NSE and BSE till 02:42 pm. There were pending buy orders for 5.08 million shares on both the exchanges, data shows.

In the past two months, the stock has rallied 138 per cent after it reported a healthy set of numbers for the quarter ended September (Q2FY22), driven by robust demand after the lifting of Covid-related lockdown restrictions. In comparison, the S&P BSE Sensex has slipped 4.5 per cent during the same period. The stock has zoomed 1,786 per cent from its March 2020 low of Rs 3.05 on the BSE.

Trident is vertically integrated textile (yarn, bath & bed linen) and paper (wheat straw-based) manufacturer and is one of the largest players in home textile space in India.

For Q2FY22, Trident had reported the highest-ever quarterly profit after tax (PAT) of Rs 228.8 crore, on the back of highest-ever quarterly revenue of Rs 1,673 crore. The company's earnings before interest, taxes, depreciation, and amortization (ebitda) margin improved 540 basis point to 24.7 per cent in Q2FY22 from 19.3 per cent n Q2FY21.

The company said it has begun commercial production of yarn in new spinning unit with a capacity of 61,440 spindles and 480 rotors on July 27, 2021.

The demand trend in Home Textiles is expected to continue, with freight cost gradually subsiding and pent-up demand in the US and Europe market. The Paper segment is expected to see a sharp recovery with the opening of offices and educational institutes.

"The US and Europe are major importers of Home Textile products globally. Since people could not celebrate festivals last year due to Covid-related lockdown restrictions, a lot of pent-up demand is being witnessed in the upcoming festive season in the US and Europe. This has led to strong demand in 3Q and in 4QFY22 as well. Increased global awareness on health and hygiene and working from home are the growth drivers for Home Textile products as home décor is the new 'global favorite’," Motilal Oswal Financial Services said in result update.

The healthy growth in India’s Home textile segment is expected to continue on increased awareness of health and hygiene, easing logistics issues, and market share gains from China and Pakistan in the US market, the brokerage firm said.  The stock however, trading above target price of Rs 47 per share.