Arvind, KPR Mill, Gokaldas: Textile stocks that can gain up to 12%

Major textile stocks are witnessing sideways to breakout formations, this may see stronger interest of market participants.

Textile stocks, in the past one year, have witnessed a significant re-rating with readymade garment exporters (RMG) stocks like KPR Mills and Gokaldas Exports (GEL) rallying around 6x.

According to analysts at ICICI Securities, a material improvement in financial performance (RoCE for KPR improved 440 bps to around 24% in FY21), deleveraging of balance-sheet and robust order book for the companies have been key triggers for the re-rating.

"Apparel exporters, in the past couple of quarters, have witnessed strong customer interest owing to many large global retailers diversifying their sourcing and reducing dependence on China. Overall order booking