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 :