Textile rally will fizzle out without budget sops: Paras Adenwala

Paras Adenwala, MD & Principal Portfolio Manager, Capital Portfolio Advisors

With the Textile Minister himself saying not to expect too many sops this budget, would it take the fizz out of the textile space which is just getting into momentum?

Textile space has been doing well due to a few reasons. One reason is the good amount of energy that the minister has been showing towards the sector. Second, we have seen increase in yarn prices in the last four to five months. So fundamentally, there has been some amount of change in the fundamentals of this sector and therefore, we have seen some kind of re-rating happening but for this to continue, the end product prices should continue to remain firm which in the past have been very fickle and therefore, I would wait for the budget. There could be some budget sops but that has to be begged aptly by continuing strong fundamentals. If that does not happen, then the rally in the textile stocks will fizzle out.