Textile stocks shine; Donear, Siyaram, Mafatlal, Indo Count zoom up to 20%

Analysts believe, the textile space witnessed a healthy consolidation in past couple of years and is now resuming the upward momentum.

Shares of textile and related companies were on a roll, zooming up to 20 per cent on the BSE in Monday’s intra-day trade backed by heavy volumes on hopes of improvement in business outlook. In comparison, the BSE Sensex was down 0.45 per cent at 81,767 at 02:01 pm.

 

Donear Industries and Siyaram Silk Mills surged 20 per cent, Mafatlal Industries rallied 14 per cent, while, Jindal Worldwide, Zodiac Clothing Company, Shiva Mills, Suryalata Spinning Mills and Surylakshmi Cotton Mills soared 10 per cent each. Indo Count Industries, Arvind, Himatsingka Seide and Vardhman Textiles were up in the range of 2 per cent to 6 per cent.

 

The textile space witnessed a healthy consolidation in past couple of years and is now resuming the upward momentum.  According to analysts, India’s exports have started to grow better than export market which indicated market share gain. This is on account of China+1 and retailers looking at alternatives to Bangladesh due to the economic instability there. 

 

In the long term, growth prospects of the Indian textiles industry are strong, aided by augmentation of capacity with value-added products, China +1 factor, the government entering into a trade agreement in various countries, incremental benefits from the Production Linked Incentive (PLI) scheme, and market share gains in export markets. 

 

Among individual stocks, Gokaldas Exports hit a new high of Rs 1,210.65, surging 48 per cent in one month. The company’s management expects a strong recovery in the performance in the second half (October to March) of the financial year 2024-25 (H2FY2025) and expect the momentum to sustain with improving demand in the global markets. 

 

Market share gains in existing geographies, diversification by adding clients in new markets, and capacity expansion would help Gokaldas Exports achieve consistent double-digit revenue growth in the near to medium term (revenues to grow at 15 per cent compound annual growth rate (CAGR)). Rising apparel consumption in developed economies, shift of base from China/Bangladesh, and potential FTA signing with the UK will provide large opportunities in the long run, the brokerage firm Sharekhan said.

 

Meanwhile, Siyaram Silk Mills hit a new high of Rs 1,160; zooming 39 per cent in two days after the company on December 12 launched Cadini Italy Perfumes in India.

 

Siyaram Silk Mills is amongst India’s most renowned brands and marketers of fabrics, readymade garments, and other textiles products. In addition, the company operates and franchises a chain of retail stores, which offer menswear fashion fabrics, apparel, and accessories. The company sells its products under multiple brands that enjoy high recall value with consumers. They include brand names such as Siyaram, J. Hampstead, Oxemberg, and Cadini.

 

Looking ahead, the management is confident that the remainder of the fiscal year will be strong, driven by increasing consumer demand and favourable market conditions, setting the stage for continued growth and success.

 

Shares of Donear Industries hit a 52-week high of Rs 161, and was locked in 20 per cent upper circuit on the back of 25-fold jump in trading volumes. A combined 2.86 million equity shares changed hands on the NSE and BSE.

 

The Government of India announced various schemes to support the textile sector. Schemes like Scheme for Capacity Building in Textile Sector (SAMARTH); Amended Technology Up-Gradation Fund Scheme (ATUFS); National Technical Textiles Mission; Production Linked Incentive Scheme (PLI); PM-MITRA; Scheme for Integrated Textile Parks (SITP); National Technical Textile Mission (NTTM); and National Institute of Fashion Technology (NIFT) are aimed to skill manpower, promote ease of doing business, promote development and use of technical textiles, manmade fiber apparels and fabrics, setting up world class infrastructure including plug-and -play facilities, among others.