While I agree there is ample scope of operating leverage to play out and the possible near term triggers for the sector (FTAs etc), I am not so much sure how such downstream players shall perform when cotton/yarn prices begin to rise. With discretionary demand already tepid not sure there will be too price taking from the ultimate consumers. Also, I felt the sudden QIP done was quite contrary to the management’s tonality in the Q2 concall. Scope of RoE and RoCE expansion is also very limited as compared to its peers.
Valuations are ofc in favor but that’s across the textile industry.
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