These 2 smallcap stocks have zoomed over 100% in 5 wks; hit multi-year high

Total revenue rose 32 per cent year-on-year (Y-o-Y) at Rs 195.02 crore, compared to Rs 147.84 crore in the same period last year, primarily driven by strong demand from existing customers. Earnings before interest, tax, depreciation and amortisation (Ebitda) margin improved to 23.77 per cent in Q1FY25, as compared to 11.19 per cent in Q1FY24.

Meanwhile, on August 19, 2024, Sabu M Jacob, chairman and managing director of KGL, stated that the company’s capacity utilisation is currently at its peak and the factory order position is fully booked up to June 2025. 

With the surge in demand and favourable global market conditions, the company expects to achieve its all-time high record over the last three decades in terms of turnover and profits, Jacob said.

In the past five weeks, the stock price of KGL has zoomed 131 per cent from the level of Rs 211.20 on August 5. The company is the world’s second-largest manufacturer of cotton and organic cotton, ready-to-wear garments for infants and children aged 0-24 months. Operating under the yarn-to-garments model, KGL is a fully export-oriented unit that caters to major clients in the US and European markets.

The global infant garments industry, valued at approximately $45 billion in 2023, continues to demonstrate robust growth potential. With the increase in world population, it is anticipated to grow at a projected compound annual growth rate (CAGR) of 4.7 per cent between 2024 and 2032.

Further, KGL is strategically expanding its operations in Telangana through its subsidiary, Kitex Apparel Parks Ltd (KAPL). The ambitious expansion project has a total planned cost of approximately Rs 3,000 crore, funded through a 70:30 debt-to equity ratio, with equity contributions split between KGL and Kitex Children’s wear (KCL). The expansion includes two key projects: one at Kakatiya Mega Textiles Park and another at Sitarampur Industrial Park near Hyderabad.

Meanwhile, shares of Tribhovandas Bhimji Zaveri (TBZ) have soared 17 per cent to Rs 274.35 on the back of a two-fold jump in the company’s scrip’s average trading volumes. In the past five weeks, the stock of the jewellery company has zoomed 102 per cent from the level of Rs 135.75. It is trading at its highest level since December 2012.

TBZ specialises in crafting and retailing an exquisite range of meticulously handcrafted gold, diamond, jadau, and platinum jewellery. The company manufactures a wide array of jewellery from exquisite pieces, for weddings, festivals, and special occasions to contemporary, lightweight designs for daily wear.

However, TBZ, in an exchange filing on August 29, said the movement in the company’s share price is purely market driven and may be combination of various factors including market conditions. The management of the company is in no way connected with the movement in the price of the shares.

“We would like to inform you that there is no price sensitive information or announcement which is pending to be intimated to the Exchange concerning operations of the Company. We hereby further inform that we are not aware of the reason of significant movement in the price of Company’s shares,” TBZ had clarified to the exchanges on being quizzed about the movement in its stock price.

That apart, the company’s management had said, the outlook for the jewellery industry remains optimistic in its FY24 annual report. As India progresses towards becoming a $5-trillion economy, the management anticipates a steady increase in income levels and consumer spending. Despite challenges such as inflation and global uncertainty, demand for jewellery is expected to grow, driven by robust economic growth, favourable demographics, expanding middle class, and evolving consumer behaviours, it added.

The outlook for the Indian gems and jewellery industry is positive, with anticipated ongoing shifts in consumer purchasing behaviour transitioning from the unorganised to the organised sector.

First Published: Sep 09 2024 | 1:26 PM IST