Low PE high ROE multibagger stock: This textile company to install 8.334 MW solar power plant worth Rs 39.08 crore!

The stock gave multibagger returns of 140 per cent in 3 years and over 600 per cent in 1 decade.

Ambika Cotton Mills Limited informed that the company has entered into a definite proposal to install a solar power plant for a capacity of 8.34 MW over the rooftop at its manufacturing plants located at Dindigul in the State of Tamil Nadu for captive consumption at an estimated cost of Rs 39.08 crore, to be met out of internal accruals, in respect of which application has duly been submitted to the State Government of Tamil Nadu. The project would generate 1.157 crore units annually on its completion.

Ambika Cotton Mills is engaged in manufacturing and selling speciality cotton yarn catering to the needs of manufacturers of premium branded shirts and t-shirts. Exports constitute a significant portion of the operations.

On Thursday, shares of Ambika Cotton Mills plunged 0.39 per cent to Rs 1,535.15 per share from its previous closing of Rs 1,541.10 with an intraday high of Rs 1,550.55 and an intraday low of Rs 1,525.20.

Ambika Cotton Mills is a well-performing company with a strong financial profile. The company has a market capitalization of Rs 880 crore and its stock price has grown at a CAGR of 33 per cent over the past 3 years. The shares of the company have a PE of 7.85x and a ROE of 15 per cent.

Additionally, the company is almost debt free and has been maintaining a healthy dividend payout of 19.50 per cent. The shares of Ambika Cotton Mills are currently trading at 1.08 times its book value, which is a fair valuation.

The stock gave multibagger returns of 140 per cent in 3 years and over 600 per cent in 1 decade. Investors should keep an eye on this Small-Cap textile stock.

Disclaimer: The article is for informational purposes only and not investment advice.