Stock watch: Sangam India

In the domestic textile sector, the Sangam India stock is worth looking at. In a lacklustre Monday market, the stock rose 4.78 per cent to Rs 77.85 with a volume of around 95,000 shares.

Although, over the last week, the stock price and volumes declined, it was on account of the volatility of the market. Analysts are bullish on the company and say that it is a good long-term bet.

The Rajasthan-based company is a manufacturer of polyester-viscose dyed yarn. It has planned a capex of Rs 540 crore for expanding and forward integrating its textile operations.

The company considers adding 97,000 spindles and expanding its spindleage to 1.6 lakh spindles . As a move to forward integrate, the company plans to install 40 more weaving machines and set up a processing house with a capacity of about 80,000 tonne a day.

To cut power costs "" an important element in a spinning mill "" the company plans to set up a new 21-mw power plant for captive consumption. The benefits of the added capacities would accrue only in FY08.