Shares of KPR Mill Limited rose 17 per cent to hit an all-time high of Rs 2,349.60 on BSE after the Union Cabinet approved production linked incentive (PLI) scheme for the textile sector for manmade fibre (MMF) apparel and fabrics and 10 segments of technical textiles to make the Indian textile sector globally competitive.
The scheme will help in increasing India's share in the manmade textiles and technical textiles sector, Textiles Minister Piyush Goyal said.
The stock ended 13.22 per cent higher at Rs 2,273.80 against the previous close of Rs 2,008.30. It has been gaining for the last two trading sessions.
With a market capitalisation of Rs 15,646 crore, the shares stand higher than 5 day, 100 day and 200 day moving averages but lower than 20 day and 50 day moving averages. The mid-cap stock has risen 161 per cent since the beginning of this year and has delivered 301 per cent return in the last 12 months.
"PLI for textiles along with RoSCTL (Rebate of State and Central Levies and Taxes), RoDTEP (Remission of Duties and Taxes on Exported Products) and other measures of government in sector e.g. providing raw material at competitive prices, skill development etc will herald a new age in textiles manufacturing," the government said in a release.
The PLI scheme for textiles is part of the overall announcement of PLI schemes for 13 sectors made earlier during the Union Budget 2021-22 with an outlay of Rs 1.97 lakh crore.
With this scheme, the government has announced PLI schemes for 13 sectors which it said will lead to a minimum production of Rs 37.5 lakh crore in India over five years and generate minimum employment for nearly 1 crore people over the period.
ICICI Direct said KPR has two major capex projects in the pipeline worth Rs 750 crore towards garmenting facility (Rs 250 crore) and ethanol facility (Rs 500 crore). It noted that robust opportunities in US market will give strong visibility for sustained growth in exports.
"We model revenue, earnings CAGR of 18%, 21%, respectively, in FY21-23E with higher RoCE of 26%. We like KPR as a structural long-term story to play the apparel export space," the brokerage house added.
It has a 'Buy' rating on the stock with a target price of Rs 2310 per share.
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