Hitesh portfolio

Hello sir, I am following your writeup for the past 2 to 3 years. It is a commendable job you are doing for new comers.

What is your view on Kitex… It was a well discussed company in the platform. Later the promoter entry into politics and few corporate issues punished the company.

Last 2 years kitex story seems to be an interesting for me and if you have any opinion on the below observation it would a new area of thoughts for me.

My studies says in a longer period company share will go up based on earnings growth.

So How to identify a company whose business and profit will double in next 3 years, simply observe new capex and look for its feasibility and expansion in the area. And buy those company only when it’s sure is valued at reasonable price.

I see kitex could be a value plus growth and a turnaround over 3 to 5 years.

Coming to kitex it is based in my state and manufacture infant dress with PAT of 100 crore top line of 700crore within no debt. Kitex is 2nd world largest kids wear manufacturer in the world with a day production of 5 Lakhs units.

What interested me they had a plan to expand their business in Kerala. But decided to invest in Telegana and put out 2 plant in telegane and they will be exporting 25 lakhs kids wear from telegane (almost 4x expansion). More interested telegana govt provided lot of incentives and one among the many is 75% interest subsidy for next 10 years. MD says they will get 75% subsidies over a period 5 to 10 years.
Kitex new manufacturing unit will be the world largest manufacturing unit.

Company market cap was 5000 crore few years back and currently valued at 1000 crore. And last year share has doubled from 140 to 280 range.

If new unit make profit can the market value go up? and PE could go for a re rating ?

Expecting your opinion on my understanding and evaluation.

Thanks in advance.