Shares of Kitex Garments, world’s second largest manufacturer of infant garments, were locked in upper circuit of 10 per cent at Rs 401.40 per share, hitting over seven-year high on the BSE in Tuesday’s intra-day trade on strong business outlook. In the past month, the stock of garments & apparels stock has zoomed 90 per cent, as compared to 4.8 per cent rise in the BSE Sensex. Kitex Garments is trading at its highest level since June 2017. It had hit a record high of Rs 764.29 on July 3, 2015.
On August 19, 2024, Sabu M Jacob, chairman & managing director of Kitex Garments, stated that the company’s capacity utilisation is currently at its peak and the factory order position is fully booked up to June 2025. With the surge in demand and favourable global market conditions, the company expects to achieve its all-time high record over the last three decades in terms of turnover and profits, Sabu M Jacob said.
Meanwhile, for April to June quarter (Q1FY25), total revenue rose 32 per cent year-on-year (Y-o-Y) at Rs 195.02 crore, as compared to Rs 147.84 crore in the same period last year, primarily driven by strong demand from existing customers. Earnings before interest, tax, depreciation and amortisation (Ebitda) margin improved to 23.77 per cent in Q1FY25 as compared to 11.19 per cent in Q1FY24. Net profit during the quarter more-than-doubled to Rs 29.95 crore from Rs 7.99 crore in a year ago quarter.
Meanwhile, the Group is in the process of setting up integrated textile units in Telangana, in two phases under Kitex Apparel Parks Limited (KAPL), at a total cost of approximately Rs 2,890 crore (including preoperative expenses), to be funded by term loans from banks (70 per cent) and promoter contributions. While there was no cost overrun as of March 2024, the overall project cost is expected to increase by about Rs 400 crore due to an increase in the scope of the project towards automating seamless movement of goods across units through conveyors, addition of power substations and other improvements, the rating agency ICRA said.
The project’s first phase is likely to be completed by the end of March 2025 and the second by the end of March 2026. While the entity had anticipated to complete its first phase a year ahead of the Scheduled Date of Commencement (SCOD), the same could not be completed owing to operational reasons and the entity now expects to commence spinning operations at Warangal by September 2024, ICRA said in rating rationale.
