Have you noticed outperformance in this Textile stock?

Textile stocks are gaining their mojo back as the sector suddenly finds itself in a sweet spot this year. Several factors are working in favor of the sector including the government support and incentives to the sector.

Textile stocks are gaining their mojo back as the sector suddenly finds itself in a sweet spot this year. Several factors are working in favor of the sector including the government support and incentives to the sector.  

Sutlej Textile is one stock that has delivered impressive performance both on bourses and in terms of  financial improvement. Sutlet is India’s largest spun dyed Yarn Manufacturer and one of the leading manufacturers of Melange Yarn. The company has presence in all Value-added yarns and high-end Melange Yarn. 

Owing to improved domestic demand and exports the company is able to register growth in revenue. The management expects to deliver higher single digit revenue growth next quarter. The capacity utilization is at 90 per cent for Sutlej Textile. 

Cotton prices surged by 28 per cent compared to last quarter and the raw material prices are expected to remain high in coming months. The revenue increased at Rs 591 cr v/s 197 cr in Q1FY21 v/s 688 cr in Q4FY21.The debt-to-equity ratio is below 1 while the long-term debt has reduced for Sutlej.  

Trading at ~72 per share Sutlej is sitting pretty as multiyear support levels after breakout out of key resistance levels with increased volume. In one year, the stock has jumped by nearly 297 per cent while in one month the stock is up by nearly 30 per cent. In 2021 alone the share price of Sutlej Textile has increased by more than 57 per cent.