Textile scrip rises on electric theme to all-time high share price

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By S Jha

New Delhi, December 12: At a time when the stock market is sideways, a textile company has just climbed to its all-time peak, giving nearly a seven-fold return in just about 15 months’ time frame. The textile sector is not currently buzzing, with the investors showing more interest in the banking scrips. But this company, which is engaged in manufacture of denim to yarn dying, just keeps flying on the bourses each day.

Jindal Worldwide was available at a price of Rs 62 in September 2021. In just 15 months, the scipt closed on Monday at Rs 407, while it touch an intra-day high of Rs 419. The near seven fold return on Jindal Worldwide has come despite the fact that the earning per share (EPS) of the company came down from about two per cent to 1.63 in the September quarter. This is in line with most of the textile companies, which have been beaten in the last six months both on their earnings and also their share prices.

In contrast, Jindal Worldwide is not looking back despite the financials coming under stress. This scrip began buzzing after it acquired a Mumbai-based electric vehicle company, Earth Energy. Jindal Worldwide had entered into the segment through its subsidiary in May this year, making a foray into the buzzing electric vehicle segment. Jindal Mobilitric is the subsidiary of Jindal Worldwide. The acquisition of the Mumbai-based startup is being assessed to give a new wing of growth to Jindal Worldwide, as it plans to set up a manufacturing plant in Ahmedabad in Gujarat soon. It plans to manufacture electric scooty and bike.

Electric vehicle theme has been an investor theme on the bourses, as the investors are looking at the companies favourably, which are entering into the segment. Tube Investment has also acquired a Faridabad-based electric vehicle start-up, which made the scrip buzzing. Hero Moto Corp, Mahindra and Mahindra, Tata Motors are all aggressively ramping up their facilities for their electric ventures.

On the technical chart, Jindal Worldwide broke out from its February, 2022 peak of Rs 368 last week, and since then it has been climbing on the bourses. Among the textile companies, Jindal Worldwide along with Go Fashion is commanding high PE at 58.6. The ROCE (return on capital employed) of the scrip is 19.2, while RoE (return on equity) is 22.8 per cent. It has reported a compounded profit growth of 54 per cent in the last three years during which the stock price CAGR was 85 per cent.