Financial Daily from THE HINDU group of publications
Thursday, Sep 02, 2004
Financial Daily from THE HINDU group of publications Thursday, Sep 02, 2004 |
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Markets
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Stock Markets Banswara Syntex gains on garment business foray Our Bureau
Mumbai , Sept. 1 THE stock of Banswara Syntex has been on the rise over the last few days due to the company's foray into garment manufacturing this fiscal. Overall interest on textile sector is also adding interest in the stock. Stock price of Banswara Syntex has gained 27.5 per cent in the last one week along with rise in trading volumes. In today's trading, the stock was up 9.96 per cent at Rs 38.65 on the BSE with volumes of 80,766 shares compared to average trading volumes of less than 5,000 shares. According to brokers, the stock is on the rise due to the company's entry into the garment manufacturing business. Banswara Syntex has set-up a manufacturing unit in Daman with capacity of 50,000 units of trousers per month. "Company is operating its manufacturing unit at 50 per cent capacity and from 2005 onwards it will be 100 per cent. On 100 per cent capacity utilisation, the company is expected to report revenues of around Rs 25-30 crore from this segment alone," said an analyst with a domestic broking firm. He said company has potential to show good growth from 2005 when the textile quota system is over. Currently, the company is mainly into yarn and fabric business and, of it, 50 per cent is exported. For the financial year ended March 2004, the company reported a net profit of Rs 8.59 crore on sales of Rs 294.54 crore. On equity base of Rs 6.77 crore, EPS is Rs 12.68. For the first quarter, it reported a net profit of Rs 1.7 crore on revenues of Rs 78.87 crore, and its EPS was Rs 2.52. According to analysts' estimates, for 2004-05, EPS of the company would be around Rs 15 and based on current market price, the stock is quoting at price-earning ratio of 2.6. "At current price, the stock is safe bet compared to other textile companies shares which are quoting at a much higher P/E ratio," said a broker.
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