The Hindu Business Line : Textile stocks firm on Budget hopes

TEXTILE stocks spun gains on the bourses today, primarily on Budget hopes. However, counters of the textiles companies, which had substantial urban real-estates, attracted additional premiums for potential value unlocking.

Stocks such as Bombay Dyeing, Raymond and Century Textiles moved up at a higher rate than the rest in the pack because of real-estate valuations. Bombay Dyeing, Raymond and Century Textiles spurted by 20 per cent, 9.9 per cent and 9.28 per cent respectively.

However, Arvind Mills gained 5.91 per cent, Nahar Spinning 5.4 per cent, Vardhaman Spinning 3.33 per cent, Mahavir Spinning 2.91 per cent and Welspun India by 1.58 per cent.

According to Mr Ajay Jaiswal of Lohia Securities, some of the players may have picked up the real-estate factor for adding premium to the valuation but that is purely sentimental and temporary.

Mr Nikhil Tacker of A.C. Mehta Investment Intermediate said for stocks such as Bombay Dyeing, much of such valuations has been factored in. Analysts tended to indicate that there is hardly any co-relation between opening up of construction sector for FDI and real-estates of textiles mills.

"As it is, unlocking of property valuation is in the nature of one-time bonanza and cannot influence the P/E multiple the way the growth prospects in fundamentals do," said an industry insider.

However, the market was expecting certain positive announcements from the Budget.

According to Mr Darshan Mehta of Arvind Brands, the apparel-exporting sector is looking forward to some kind of labour reforms. The textiles manufacturing sector is expecting easier fund flow, excise duty rationalisation and certain reliefs for greenfield projects. "Capacity expansion apart, we need to have fresh capacities to feed the apparel sector in order to maintain the competitive operating margins," he added.

According Mr Shashin Upadhyay of Anagram Stockbroking, the Indian textiles sector is surely poised for growth on account of quality. But it has to move up from the current market share of 3 per cent.

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