Alok Industries up 13% in muted market as 116 million shares change hands

Shares of Alok Industries soared 12.5 per cent to Rs 20.11 per share in Thursday's intraday, ruling near its 52-week high of Rs 21.7, amid heavy volumes.

At 12:05 PM, shares of the textile company was quoting at Rs 19.83 per share, up 11 per cent, as against 0.11 per cent dip in the benchmark S&P BSE Sensex. A combined 116.46 million shares have, thus far, changed hands on the BSE and NSE in multiple block deals. 

Over the past one month, the stock has rallied 22 per cent as against a 2 per cent decline in the benchmark indices. 

Meanwhile, on August 14, billionaire Mukesh Ambani-owned Reliance Industries said it would likely invest around Rs 14,200 crore in its subsidiaries in the current financial year. Of this, the largest chunk of Rs 7,000 crore would go to Alok Industries. 

"RIL proposes to provide support to Alok Industries through investment in securities, loans & advances, and guarantees from time to time to enable AIL to meet its funding requirement," the company mentioned in its report on material related party transactions.

Alok Industries is promoted by Reliance Industries and JM Financial Asset Reconstruction Company in accordance with the resolution plan approved by the National Company Law Tribunal, Ahmedabad Bench. RIL holds 40.01 per cent stake in AIL, while JM ARC holds 34.99 per cent stake.

AIL is India's largest fully integrated textile company with a dominant presence in the cotton and polyester segments. The company has created global sized capacities and expanded its markets across the global territories. 

Its main business involves weaving, knitting, processing, home textiles, ready made garments and polyester yarns.[4] It exports 26% of its products to over 90 countries in the US, Europe, South America, Asia and Africa.

In the April-June quarter, the textile manufacturer reported a 28.93 per cent year-on-year decline in total income at Rs 1,415.66 crore, as against Rs 1,992.02 crore in the corresponding quarter last year.

Its net loss for the quarter widened by 59.73 per cent to Rs 226.14 crore in Q1-FY24, compared to Rs 141.58 crore last year.

The company has reported earnings per share (EPS) of Rs -0.46 for the period ended June 30, 2023 as compared to Rs -0.29 for the period ended June 30, 2022.

That said, Indian Home textile players expect demand to improve from Q2-FY24 with companies indicating an upside owing to the festive season. Moreover, free trade agreements (FTA) discussions are picking pace with India planning to hold FTA discussion with UK, Canada, and EU on the sidelines of the G20 meet.