Textile stock for 46% upside

Today we are covering a stock from the textile sector. India is seeing Capex expansion in textile business due to increased demand and future outlook.

Stock Name : Sangam (India ) Ltd , the company is in business of manufacturing and selling of Synthetic Blended, Cotton & Textured yarn, Fabrics, Denim Fabrics and Ready made seamless garment having key customers such as Trident Limited, Marks & Spencer, Reliance Trends, Zivame, Myntra, Lifestyle International, Benetton and Westside.

Stock Analysis : Company has a market cap of 1178 crores against sales of over 2800 crores in last 12 months , the bottom line profit is 180 crores in last 4 quarters.

Research Remarks :

  • Stock has 57% less market cap than tTM Sales
  • Stock is having more than 17% bottom line profit of its market cap which is very attractive
  • debt is comfortable with d/e RATIO @ 0.95 & Interest coverage ratio of 5x
  • There has been technical breakout where in 50 dMA is trying to cross 200 dMA levels
  • good customer base in india & Abroad
  • Concerns : Y-o-Y Lower Operational cashflow & Heavy investment in capex , Plant and machinery using borrowed funds.

Our strategy : We may buy the stock at current levels of 262 with a target of 370 + in 6 months to 12 months time frame.

Financial Analysis of the company :

Technical Analysis : Technically Stock Is Showing A Cup & Handle Pattern On Daily & Weekly Basis :

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