During Tuesday’s trading session, the shares of the world’s second-largest manufacturer of infant garments hit a 5 percent upper circuit at Rs. 691.7 on BSE, after the company announced fixing a Record Date for bonus issue in a 1:2 ratio.
With a market cap of Rs. 4,599.8 crores, the shares of Kitex Garments Limited opened in the red at Rs. 649, down by nearly 1.5 percent, as compared to its previous closing price of Rs. 658.8.
What’s the news
According to the latest regulatory filings with the stock exchanges, Kitex Garments Limited has fixed Friday, 17th January 2025, as the “Record Date” to determine the eligibility of shareholders for issuance of the Bonus Shares.
On 22nd November 2024, the company’s Board approved the issuance of bonus shares in a 1:2 ratio, where shareholders will receive 2 new fully paid-up equity shares with a face value of Rs. 1 for every 1 existing fully paid-up equity share of Rs. 1 held.
Financials
Kitex Garments reported a significant growth in revenue from operations, experiencing a year-on-year increase of nearly 61.2 percent, rising from Rs. 134 crores in Q2 FY24 to Rs. 216 crores in Q2 FY25.
Similarly, during the same period, the company’s net profit increased from Rs. 13 crores to Rs. 37 crores, representing an impressive growth of around 184.6 percent YoY.
Management Guidance for FY25
In FY25, the company aims to achieve a record annual turnover exceeding Rs. 1,000 crores. It plans to merge Kitex Childrenswear Limited (KCL) with Kitex Garments Limited and targets a revenue of Rs. 7,500 crores upon reaching full operational capacity.
Additionally, the company wants to become the largest Farm-to-Finish apparel manufacturer globally, with unmatched capabilities.
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Key Financial Ratios
In terms of key financial metrics, Kitex Garments has a Return on Equity (RoE) of 6.33 percent and a return on capital employed (RoCE) of 6.92 percent. Additionally, the company’s debt-to-equity ratio stands at 0.92.
Stock Performance
The stock has delivered multibagger returns of nearly 203 percent in one year, as well as around 219 percent returns in the last six months. However, the shares of Kitex Garments have given negative returns of about 9 percent in the last one month.
About the company
Established in 1992, Kitex Garments Limited is a leading Indian apparel manufacturer and exporter of knitted garments for infants and kids.
This Kochi-cased company is currently the second largest producer of children’s apparel in the world and is now in the process of setting up operations in the United States of America (USA).
Written by Shivani Singh
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