Nuvama Launches Coverage on KPR Mill and Two Textile Stocks, Predicting Up to 35% Upside Potential.

Nuvama Institutional Equities has strategically initiated coverage on three prominent players in the Indian textile sector: KPR Mill, Indo Count Industries, and Sanathan Textiles. This initiative aligns with a significant global transformation in textiles, driven by a notable shift in sourcing from China to alternative manufacturing hubs. The brokerage has bestowed ‘Buy’ ratings on all three companies, predicting gains of up to 35%. This shift represents a pivotal moment in a global textile market valued at approximately $1.6 trillion, where China’s share of US apparel imports has diminished substantially over the past decade, thereby creating opportunities for India, along with competitors like Vietnam and Bangladesh.

KPR Mill, recognized as India’s largest publicly listed garment manufacturer, showcases a fully integrated model spanning from cotton yarn to garmenting. Nuvama’s analysis underscores KPR’s ability to maintain robust production levels, achieving utilization rates of 88–98% amidst ongoing expansions. The target price set at Rs 1,276 suggests an upside potential of 21.5% from its previous closing price, marking it as a direct beneficiary of the global garmenting market’s recovery.

Indo Count Industries stands out as the world’s largest bed-linen producer, pivoting its focus towards higher-margin products such as branded bedding. Supported by its manufacturing presence in the US, Nuvama projects a target price of Rs 541 per share, representing a significant upside potential of nearly 35%. Meanwhile, Sanathan Textiles, specializing in value-added polyester yarn, is well-positioned to capitalize on the global shift towards Man-Made Fibres (MMF). Nuvama’s forecast includes a target price of Rs 585 per share, implying over 23% upside, buoyed by favorable regulatory conditions including Quality Control Orders and anti-dumping measures affecting Chinese imports.

Nuvama’s report emphasizes that the upcoming structural opportunities for Indian textile exporters are primarily propelled by supply-side adjustments rather than a surge in demand, as global trade trends remain relatively stable. Factors such as tariff parity, Free Trade Agreement (FTA) access, and government policy alignment are identified as pivotal tailwinds enhancing the competitive edge of Indian exporters. With the convergence of trade access and favorable policy incentives, Indian textile majors are poised for sustained growth over the coming years, particularly in the segments of garment manufacturing and specialized textiles, which exhibit superior asset turnover and higher Return on Capital Employed (ROCE).

Source: The Economic Times

(Expert Note: This report was prepared by the Wealthova team.)