Amid strong export outlook and government initiatives, this textile stock Indo Count Industries backed by ace investor Mukul Agrawal has the potential to grow over 52 per cent, expects Edelweiss Research. The scrip of Friday closed over 10 per cent higher to Rs 138 per share on the BSE.
Being bullish on the textile sector over the medium-to-long term, brokerage points out triggers like a visible shift in textile export demand towards India, driven by China + 1 adoption, various government initiatives, and a high probability of signing FTA agreements with the UK and Europe.
However, the near-term headwinds such as channel inventory correction heightened commodity inflation, and potential dip in demand due to the higher-than-usual interest rate scenario in the US affecting discretionary spending persist, says Edelweiss.
The management of Indo Count Industries expects demand to revive by the end of the year, driven by growth in textile exports. In this regard, the brokerage maintained a Buy rating with a revised target price of Rs 210 from Rs 220 per share), valuing it at 11x FY23E earnings estimates.
The home textiles market is witnessing a slowdown currently owing to a slight shift in demand towards apparel/garments, caused by the reopening of the economy and supply chain issues, exacerbated by geopolitical tensions, Edelweiss said quoting Indo Count management.
Ace investor Mukul Agrawal holds 2,250,000 equity shares, which comprises 1.1 per cent stakes in Indo Count, as per the latest shareholding pattern of the company available on the BSE. Agrawal publicly holds 51 stocks with a net worth of over Rs 2,241.9 crore, as per trendline.com.
The stock in the last one month has outperformed the market, by falling marginally by 2.7 per cent as compared to a 2.8 per cent decline in the BSE Sensex. In the last 5 sessions, the stock gained over 8.5 per cent as compared to a nearly 3 per cent rise in the benchmark.