 "This Mukul Agrawal portfolio stock soared 123% in 6 mths; up 647% in 2 yrs")
Shares of Pearl Global Industries (PGIL) hit a new high of Rs 1,422.05, surging 9 per cent on the BSE in Monday’s intra-day trade in otherwise weak broader market. The share price of smallcap garments and apparels company surpassed its previous high of Rs 1,360.75 touched on December 17, 2024.
At 01:20 PM; PGIL was trading 8 per cent higher at Rs 1,412.90, as compared to 0.35 per cent rise in the BSE Sensex. However, the BSE Smallcap index was down 0.61 per cent at 54,810.
In the last six months, the stock price of PGIL has more than doubled or zoomed 123 per cent, as against 1.3 per cent rise in the BSE Sensex. In last two years, it has skyrocketed 647 per cent from level of Rs 190.45 on the BSE.
On January 5, 2024, the stock split in ratio of 1:1 i.e. sub division of face value of equity shares of Rs 10 to Rs 5 each. The company had said that the rationale behind stock split was to enhance the liquidity of company's equity shares and to encourage participation of retail investors by making equity shares of the company more affordable.
Investor Mukul Mahavir Agrawal held 1.4 million equity shares or 3.05 per cent stake in PGIL, the shareholding pattern data shows. Sanjiv Dhireshbhai Shah, one of the retail shareholders, has 4.52 per cent holding in the company, data shows.
PGIL is engaged into the business of manufacturing, sourcing and trading of ready to wear apparels in India and overseas, through its overseas subsidiaries. The manufacturing facilities of the company are established In India, Bangladesh, Indonesia, Vietnam and Guatemala. The company’s one of the step-down subsidiary Prudent Fashions has manufacturing facilities at Bangladesh. Pearl Global (HK), Hong Kong, is also a wholly owned subsidiary of the Company, engaged in the business of sourcing and trading of ready to wear apparels in Hong Kong.
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In first half (April to September) of the financial year 2024-25 (H1FY25), the company's consolidated revenues grew by 22 per cent on a year-on-year (YoY) basis to Rs 2,277 crore on the back of an increase in sales volumes, following a 9 per cent Y-o-Y growth in FY2024. While the operating margins remained flat at 9.5 per cent in H1FY25, an increase in the scale of operations supported a 23 per cent rise in the operating profits in value terms, on a Y-o-Y basis.
Domestic credit rating agency, ICRA expects the company to sustain a healthy revenue growth with the likely shift in procurement by large customers from China to markets like India. This will be led by its operational strengths, which provide it with a competitive edge, including long-term relationships with renowned international retailers, which have been facilitating repeat business.
The company has raised Rs 149.5 crore in July 2024 through a Qualified Institutional Placement (QIP). The money raised is proposed to be utilised towards reducing its existing borrowings by Rs 97.5 crore and the balance towards inorganic growth initiatives and general corporate purposes. Currently, the stock of the company is trading 94 per cent higher over its QIP price of Rs 731 per share.
PGIL has plans to increase its manufacturing capacity with a proposed capacity expansion of Rs 400-500 crore over FY2025-FY2027, to be funded through a mix of internal accrual and debt. Going forward, the company is expected to continue to report a gradual improvement in its financial risk profile on the back of healthy revenue growth, driven by its plans to widen its product portfolio, client portfolio and geographical diversification over the medium-to-long-term, the ICRA said in a report.
With a robust balance sheet, steady cash flows, and global competitive advantage, the management in the company’s FY24 annual report said the company is well-positioned to grow in all the geographies to capitalise on growth opportunities. The company also aims to achieve double digit earnings before interest, tax, depreciation and amortization (EBITDA) in the coming years.