Recommendations from Textiles - Denim & Printing & Stationery Sectors

The scrips in this column have been recommended with a 15-day investment horizon in mind and carry high risk. Therefore, investors are advised to take into account their risk appetite before investing, as fundamentals may or may not back the recommendations.

ARVIND LIMITED 

CMP - Rs 57.75
BSE CODE : 500101
Volume : 8,59,129
Face Value : Rs 10
Target : Rs 65
Stoploss : Rs 53 (CLS)

Arvind Limited is one of the largest textile companies in India which has principal products and services in the form of finished fabrics and garments. Also, it is an end-to-end supply chain partner to the world’s leading fashion brands. Considering the consolidated quarterly results, its net sales fell by 19 per cent from Rs 1,868.80 crore in Q3FY20 to Rs 1,513.66 crore in Q3FY21. The operating profit dropped from Rs 199.58 crore in Q3FY20 to Rs 174.56 crore in Q3FY21. The net profit also declined around 40.38 per cent to Rs 22.21 crore in Q3FY21 as compared to Rs 37.25 crore in Q3FY20. The net borrowings reduced by Rs 197 crore during the quarter. The EBITDA margins in textiles also improved sequentially to 12.4 per cent as compared to 11.6 per cent in Q2, despite significant pressure on all input costs. The future of the textile industry looks promising, backed by strong domestic consumption as well as export demand. Hence, recommend BUY for this stock. 

MPS LIMITED 

CMP - Rs 468.35
BSE CODE : 532440
Volume : 1,410
Face Value : Rs 10
Target : Rs 510
Stoploss : Rs 435 (CLS)

MPS Limited is a company engaged in providing publishing solutions which includes typesetting and data digitization services for overseas publishers. It also supports international publishers through every stage of the publishing process. To take a look at its consolidated quarterly results, net sales rose by 38.88 per cent from Rs 83.66 crore in Q3FY20 to Rs 116.19 crore in Q3FY21. The operating profit jumped from Rs 22.04 crore in Q3FY20 to Rs 36.71 crore in Q3FY21, posting a rise of 66.56 per cent. The net profit also increased around 38 per cent to Rs 17.91 crore in Q3FY21 as compared to Rs 12.95 crore in Q3FY20. MPS boasts of robust finances and a healthy balance-sheet. In FY20, the company could generate operating cash flows of Rs 52 crore, and it continued to remain debt-free. With its strong financial performance and being extremely sound in executing business continuity plans, we recommend BUY for this stock.
(Closing price as of Feb 09, 2021)