Multibager’s textile stock doubles shareholders’ money in 2 months. Should I buy?
Multibagger stock: In 2021, a good number of shares doubled the shareholders’ money. Most of these multibagger stocks in 2021 had given a sharp upward move after the second wave of the Covid-19 pandemic. Lagnam Spintex shares came late to the list of multibagger stocks as they fell from 47.20 (closing price on November 30, 2021 on NSE) to ₹94.45 on NSE, doubling shareholders’ money in almost 2 months. However, stock market pundits are still bullish on this textile stock as Lagnam Spintex shares look positive from a fundamental and technical standpoint.
According to stock market experts, the cotton yarn market company recently announced its expansion plans with planned spending of ₹218 crore. Apart from that, the company reported revenue growth of ₹300 crores which fueled the penny stock to become a penny stock multibagger. He recently gave an escape to ₹90 levels each and it can go up to ₹115 levels in a month, according to stock market experts.
Speaking on the reason for the Lagnam Spintex share price rally; Anuj Gupta, Vice President of IIFL Securities, said: “The textile stock has been trending up and has recently given a breakthrough to ₹90 per share, which was a major hurdle for the stock. It may continue to evolve, as the company recently announced ₹300 crore growth. The cotton yarn manufacturing company also announced the expansion of pumping ₹218 crores. So it could hit triple digits soon.”
Suggest stock market investors buy this low liquidity multibagger penny stock; Sumeet Bagadia, Executive Director of Choice Broking, said: “The stock looks positive on the chart pattern and one can add this stock to one’s portfolio at the current market price for a short term target of ₹110 to ₹115 hold stop loss at ₹88 levels each.”
Lagnam Spintex, one of the leading manufacturers of high quality cotton yarn in India, recently announced its investment plan of approximately ₹218 crores for project expansion of 41,472 skeins of 100% cotton compact yarn.
The company expects additional revenue growth of around ₹300 crore per year, after installation of the additional capacity over the next two fiscal years from April 1, 2024.
After the successful completion of the proposed project in the existing facility, the production capacity of the enterprise will increase from 35 tons per day to 70 tons per day, the capex will almost double the production capacity of the enterprise and add a new compact yarn product, which enjoys high demand in domestic market and export market.
The proposed capital expenditure of 218 crore will be financed at a ratio of 3:1 by internal debt and accrued liabilities and the company will raise loans of approximately ₹164 crore (75 percent), with funding of ₹54 crores (25%) from internal sources.
Lagnam Spintex announced a 107% increase in net profit at ₹9.4 crore for the quarter ended December 31, 2021 versus net profit of ₹4.54 crores over the same period last year. Its turnover increased by 45% to reach ₹90.95 crore in Q3 FY22 from ₹62.7 crore in the period a year ago. EBITDA amounted to ₹17.87 crores in December 2021, up 76% from ₹10.16 crores in December 2020.
Warning: The opinions and recommendations made above are those of individual analysts or brokerage firms, and not of Mint.
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