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Saturday, Aug 07, 2004

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Textile stocks in limelight

Virendra Verma

Mumbai , Aug 6

TEXTILE stocks regained their interest in Friday's trading aided by the Finance Minister, Mr P. Chidambaram's indications that he might alter the tax structure on man-made fibres. The interest in these stocks was also due to the end of quota system in world textile market from 2005.

Brokers said there has been interest in textile stocks for sometime now but across-the-board rise in today's trading was due to Mr Chidambaram indications for rationalisation of taxes in man-made fibres.

Mr Chidambaram on Thursday had indicated that existing tax structure on man-made fibres would be altered in the next budget (2005-06).

In today's trading, stocks such as Bombay Dyeing, Raymond, Arvind Mills, Alok Industries, GTN Textiles. Other stocks to rise included Garden Silk Mills, Malwa Cotton, Mahavir Spinning, Ashima Syntex and Vardhaman Spinning were in the limelight.

Among them, the major gainers were Garden Silks Mills (up 10.08 per cent at Rs 50.25 on the BSE), Abhishek Industries (up 9.97 per cent at Rs 20.95), Alok Industries (up 6.86 per cent at Rs 60) and Malwa Cotton (up 9.38 per cent at Rs 48.40).

Analysts said from next year most of the textile exporters from India are likely to benefit after the dismantling of quota system.

According to broking firm ICICI Securities' forecast, there will be an exponential rise in global textile trade as 84 per cent of export quotas get dismantled from January 1, 2005 with India and China likely to be key beneficiaries.

It said India's share of global trade is forecast to grow the fastest, as India's current quota allocation is among the lowest. India's textile exports compound annual growth rate forecast at 21 per cent to $50 billion by 2010 and Wal-Mart alone intends sourcing $7-$10 billion of goods from India.

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