Cotton issue levels as textile stocks get ironing
Monday, 25 October 2010
AHMEDABAD, Oct 24 (Commodity Online): Cotton prices are giving sleepless nights to the textile industry, which has been reeling under the high cost pressure for a long time now, but the underlying fact is that the investors of most of these garment and textile companies have become wealthier with every passing day.
The stock prices of key textile and garment makers in India have been on a strong uptrend for a sustained period. The sector is buoyant with export market seemed to be recovering, joined with the robust domestic demand.
Some of the key textile stocks including, India's largest denim maker by market capitalisation, Arvind Ltd have made robust gains undeterred by the cotton supply woes.
Aarvee Denims & Exports and Ashima Ltd have also fared well on the bourses during the second quarter ending September 2010.
However, cotton shortage due to crop damage in the neighbouring Pakistan and delayed arrival in the domestic markets has lifted the prices to a record levels. The prices have already touched Rs.41,000 per bale against Rs.22,000 per bale a year ago.
Cotton shortage has caused yarn prices to escalate, which in turn has resulted into increased input cost for the textile companies.
But looking at the current uptrend in the textile stocks on the bourses, the cotton impact does not seem to be reflected on the stocks valuations on the garment companies.
Arvind Ltd has posted a gain of close to 28.5 per cent during April-September, while Aarvee Denims gained over 31 per cent during the period.
Ashima, one of the leaders in the textile industry has made a staggering gain of over 40 per cent during the second quarter of the current fiscal.
However, Ruby Mills Ltd remained lower with loss of 3.35 per cent during the period under consideration, while Abhishek Industries remained range-bound with gains of 6.65 per cent during the quarter.
Shri Dinesh Mills made moderate gains of 11 per cent, while Nandan Exim rose over 20 per cent during the quarter.
However, last month most textile stocks witnessed some consolidation, as the stock prices of most textile stocks underplayed their second quarter gains.
The stock prices of key textile and garment makers in India have been on a strong uptrend for a sustained period. The sector is buoyant with export market seemed to be recovering, joined with the robust domestic demand.
Some of the key textile stocks including, India's largest denim maker by market capitalisation, Arvind Ltd have made robust gains undeterred by the cotton supply woes.
Aarvee Denims & Exports and Ashima Ltd have also fared well on the bourses during the second quarter ending September 2010.
However, cotton shortage due to crop damage in the neighbouring Pakistan and delayed arrival in the domestic markets has lifted the prices to a record levels. The prices have already touched Rs.41,000 per bale against Rs.22,000 per bale a year ago.
Cotton shortage has caused yarn prices to escalate, which in turn has resulted into increased input cost for the textile companies.
But looking at the current uptrend in the textile stocks on the bourses, the cotton impact does not seem to be reflected on the stocks valuations on the garment companies.
Arvind Ltd has posted a gain of close to 28.5 per cent during April-September, while Aarvee Denims gained over 31 per cent during the period.
Ashima, one of the leaders in the textile industry has made a staggering gain of over 40 per cent during the second quarter of the current fiscal.
However, Ruby Mills Ltd remained lower with loss of 3.35 per cent during the period under consideration, while Abhishek Industries remained range-bound with gains of 6.65 per cent during the quarter.
Shri Dinesh Mills made moderate gains of 11 per cent, while Nandan Exim rose over 20 per cent during the quarter.
However, last month most textile stocks witnessed some consolidation, as the stock prices of most textile stocks underplayed their second quarter gains.