Textile firms thread up on sector hopes

 Textile counters are surging ahead on good volumes, witnessing a trend similar to that in the overall market. Even second-rung textile stocks are on the upswing.

 The scrips of most textile companies have been on the rise since last week following reports that US retailer Wal-Mart has shown keen interest in sourcing garments from India following the dismantling of the quota regime from 2005.

 This is a long-term positive development for the sector, according to analysts. Prices of most scrips have moved up in the last three months.

 Dawn Mills saw its scrip price moving up from Rs 193.00 on August 17 to Rs 591.90 on November 17, a gain of 206.68 per cent.

 Jindal Polyester is up almost 154 per cent from Rs 143 to Rs 363, Indo Rama Synthetics has moved up from Rs 40.20 to Rs 98.50, an appreciation of 145.02 per cent and Bombay Dyeing has risen from Rs 69.85 to Rs 153.45, up 119.69 per cent.

 Pantaloon Retail has surged 104 per cent, from Rs 126.30 to Rs 258.40, Alok Industries has appreciated from Rs 28.35 to Rs 52.40, up 85.01 per cent, Century Enka is up 69 per cent, Garden Silk has surged 54.00 per cent, Rajasthan Spinning has gained 50 per cent, Mahavir Spinning Mills is up 43.65 per cent, Raymond has moved up 37 per cent and Arvind Mills is up 20 per cent in the same period.

 The textile sector, comprising 221 listed companies, has seen the aggregate market capitalisation (m-cap) rising more than 34 per cent in the last three months from Rs 9,296 crore on August 17 to Rs 12,501 crore on November 17.

 According to market players, attractive valuations based on hopes of good future prospects as well as punting in small and mid-cap stocks has been driving textile stocks higher.

 Good financial performance of textile companies in recent quarters is another factor behind the revival of buying interest in textile stocks. The lifting of the quota system by 2005 is expected to give a boost to Indian textiles and apparel, especially in the export market.