Weaving profitability in new global order: 4 stocks from textile sector with upside potential of up to 45%

Some sectors underperform for years and then come into focus. Partially due to China Plus one policy, and govt's PLI scheme, the textile sector is back in focus. But there is a macro issue that textile has been completely dominated by China and other nations. The Indian textile industry has been in bad shape for decades. Given the operating matrix, will PLI scheme, other support be enough for these cos to see sustained growth to profitability. This list is drawn from Stock Reports Plus, powered by Refinitiv, with over 4,000 stocks with detailed company analysis focusing on 5 key components - earnings, fundamentals, relative valuation, risk & price momentum.

Among many industries which have seen a strong transformation in the last nine years due to policy initiatives has been the sugar industry. This is despite the fact that sugar is a state subject where central policies can only play a limited role. If one looks at the balance sheet of a large number of them, they are far better placed than they were six years ago and to some extent in the last two years even the institutional investors have started to take exposure in this sector which they have avoided for more than three decades.

While the mid and small cap saw sharp corrections on Monday, the fact is speciality chemical space has been in a very different kind of correction for the last two years. In the last five years many segments of the chemical and specialty chemical sector had been coming into focus. They stay in the limelight for some time, then as too much money chases them which makes their valuations move up sharply and then a long phase of correction after which strong players are able to move upward much faster. While they come under the broad umbrella word of “Chemical sector” the fact is that each specialty chemical company is literally an industry itself with its own operating matrix of supply chain and demand. We look at the 6 stocks, including 4 stocks where analysts have “hold” recommendation at a time when chinese headwinds are blowing.

One change for making higher provision for unsecured loans and we see all the NBFC stocks tumbling. But four weeks later what is the situation, no one on the street is even talking about it and stocks have crossed the level when the announcement was made. The fact is that some regulatory measures are indicators of overall growth potential which the regulator is just trying to moderate in order to avoid overheating of some segment of industry. The other question is that an industry like NBFC which is bound to grow given the fact that capital was, is and will remain a scarce commodity, which are the benchmark which one should use to take exposure with a long term perspective.