Kitex Garments rally over 4% on strong Q2 results

MUMBAI: Shares of Kitex Garments (KTG) surged over 4 per cent intraday after the company announced 62.1 per cent (Y-o-Y) jump in net profit for quarter ended September at Rs 19.3 crore.

The company had reported a net profit of Rs 11.9 crore in the corresponding quarter last fiscal.

Its sales increased 28.7 per cent to Rs 121 crore from Rs 94 crore, in year-ago period.

Last month, Motilal Oswal had initiated coverage on the stock with a ‘Buy’ recommendation and a target of Rs 615.

According to the brokerage, KTG has diversified its clients mix from a single client in FY09 to five currently, reducing client concentration risk and improving margins.

KTG is in the process of adding some large clients in FY15 apart from deepening business with existing clients like Gerber, Toys R Us, Jockey, Mothercare and Carter’s.

The company is in the business of manufacturing and exporting infant garments. It derives 85 per cent of its revenue from the sale of infant garments and the balance 15 per cent from the sale of fabric to Kitex Childrenwear.

At 10:00 a.m.; the stock was at Rs 481.75, up 0.82 per cent, on the BSE. It rallied 4.7 per cent to touch intraday high of Rs 500.65.