Buy Welspun India and S Kumar on correction: Ashit Suri

ET Now caught up with Ashit Suri, Fundamental Research Analyst, JV Capital Services, to find out his views on the outlook on small midsize textile stocks.

We have been seeing a very good run up in the textile space, especially in smaller midsize textile stocks. Do you think there is more to this upside?

Yes. In the textile smaller cap players, I have been suggesting Welspun India for quite some time. Besides this, S Kumar Nationwide has been doing very well because it has under its belt good brands like Belmonte and Reid & Taylor. The company is likely to come out with an IPO, which is in news already. So, valuations are pretty attractive. Good earnings growth of close to around 30-35% annually is possible, which augurs well for the stock.

Welspun India is one of the largest players for Terry towels. Its valuations are very attractive. The company's quarter-over-quarter performance has been very strong. It has good management.

These stocks are trading at PE levels of around six times only. So, there is a good very decent upside possible for the stocks and the markets internationally also have been improving. The size of the orders is improving. The outlook is good. This space is going to attract attention. Besides this, there is Alok, which is restructuring its real estate business. Although it's a long-term call on Alok, but I would like Welspun India at current levels and so also S Kumar, though it has moved up. I would say in S Kumar's any corrections, one can think of accumulating over a medium- to long-term phase.