It is a matter of common sense that when eminent stock wizards of the calibre of Billionaire Narayana Murthy, Dolly Khanna, Ashish Kacholia, Anil Kumar Goel, Prof Sanjay Bakshi, Porinju Veliyath etc make a beeline for stocks in a particular sector, we must follow them first and ask questions later.
That is why I diligently rushed out the alert in August 2015 asking “Why Are Ace Investors Aggressively Buying Textile Stocks & Is There Scope For More Gains?”
I also collated the opinion of two eminent experts, Ravish Kumar and Nooresh Merani, to explain what it is about textile stocks that has enamoured the wizards.
Since my report, textile stocks have given humongous gains as I have been diligently reporting from time to time.
Today, all textile shots shot up on news that NAMO is planning some big-bang reforms for the textile sector:
— ET NOW (@ETNOWlive) June 21, 2016
ET referred to “sources” to speculate that (i) New National Textile Policy to incentivise production by MSMEs, will also enable global brands to set up a supply chain and (ii) New National Textile Policy to look at FTAs to ensure competitive advantage, likely to include tax breaks as well.
Other leading journalists also flashed the news:
— Rishikesh Kumar (@rishhikesh) June 21, 2016
This policy aims to give major boost for domestic production and export of textiles. https://t.co/EpU0BhG1nr
— Lakshman Roy (@RoyLakshman) June 21, 2016
— CNBC-TV18 News (@CNBCTV18News) June 21, 2016
Understandably, the textile stocks were in great demand and notched up handsome gains.
|Stock||CMP (Rs)||% Gain|
More gains may be in store depending on the precise reforms that NAMO ushers in tomorrow.
It is notable that Dolly Khanna has probably got the highest congregation of textile stocks in her portfolio. She has RSWM, Nandan Denim and Nitin Spinners. Dolly also appears to be a stealth investor in Sutlej Textiles.
|Stock||Holding as of 31.03.2016||Value of holding (Cr)||YoY gains (%)|
It is worth noting that RSWM is Dolly’s high conviction stock owing to the fact that it is quoting at a low P/E. The Co has recently completed its aggressive expansion plans and has promised to become debt-free by FY19.
A few days ago, I also drew attention to the fact that experts have opined that Nitin Spinners has an upside of more than 100%.
Now, we must take note of a brilliant point made by Varinder Bansal of ET:
LMW is one among the top three players across the world; commanding a 70%
volume market share and 60% value market share in India.
— Varinder Bansal (@varinder_bansal) June 21, 2016
This is brilliant thinking by Varinder Bansal because Lakshmi Machine Works is presently languishing though it reported good results. If the textile sector sparkles, it is likely that LMW will do as well!