Textile manufacturing companies have never been darlings of Indian stock markets, mainly because of their capital intensive and cyclic nature of the business.
However, Indian textile firms which are in to branding of fabrics and apparels are potential companies which can attract eyeballs of stock market investors.
For instance, the share price of Mandhana Industries is currently trading at twice the book value. As on November 16, the share was trading at Rs 240.55 while its book value is Rs 120. It is also trading at a very low discount to its two year PE average of 11.79 against the current PE of 10.79.
Mr Mitesh Shah – CFO at Mandhana Industries which reported revenues of Rs 9.80 billion in fiscal year 2011-12 says, "Textile companies in to branding have more visibility as compared to other textile firms.
He adds, Textile firms in to branding spend a lot of money on advertising and marketing than other normal players, which increases the awareness of these companies among stock market investors".
"Moreover, textile companies which have retail operations too tend to attract the attention of investors and stocks of these companies are valued higher than those of non-branded fabric and apparel producers", he winded up by saying.
