Penny stock at Rs 23.15: This micro-cap company is expanding more into textile industry and acquired 37.72 per cent stake of Chiripal Textile Mills Pvt Ltd

The shares of the company have a PE of 17.5x, an ROE of 15 per cent and an ROCE of 15 per cent.

In a move to expand its presence in the textile industry, Vishal Fabrics Ltd acquired a 37.72 per cent stake (1,170,500 shares at Rs 135 per share) in Chiripal Textile Mills Pvt Ltd on March 30, 2024, for a total of Rs 158.02 crore. This acquisition makes Chiripal Textile Mills an associate company of Vishal Fabrics. Chiripal Textile Mills is a manufacturer and trader of various yarns and fabrics, with a turnover of Rs 539.03 crore for the financial year ending March 31, 2023. The rationale behind the acquisition is to focus on further development and growth within the textile sector.

Vishal Fabrics Ltd, a textile company established in 1985 and part of the Ahmedabad-based Chiripal Group, manufactures and distributes a wide range of fabrics including dyed yarn, denim, and custom textile work. Certified for quality and sustainability, they specialize in dyeing, printing, and processing denim and other fabrics for both their collections and client-specific jobs.

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Their fabrics come in various compositions like 100 per cent cotton, cotton blends, and modal, and they are a leading supplier of stretch denim. With a focus on innovation, they offer diverse finishes, weaves, blends, and colours. Their extensive production capacity comes from multiple facilities in Ahmedabad, Gujarat, and they boast an impressive list of clientele including well-known international fashion brands.

Today, shares of Vishal Fabrics Ltd gained 6.24 per cent to an intraday high of Rs 23.15 from its previous closing of Rs 21.79. The stock’s 52-week high is Rs 26.70 and its 52-week low is Rs 14.28. The shares of the company have a PE of 17.5x, an ROE of 15 per cent and an ROCE of 15 per cent. The company has a market cap of over Rs 400 crore and has delivered good profit growth of 26.8 per cent CAGR over the last 5 years.

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