The Hindu Business Line : Welspun India gains on order talk

THE Welspun India stock gained sharply in today's trading on market talk that the company is expected to bag export orders from various leading global brands and companies.

The expansion plan of the company to enhance its production capacity - terry towel, bed linen and cotton spinning - is to materialise by the end of this year; this also brought interest of market players into the stock.

In today's trading, the stock gained 9.46 per cent at Rs 111.05 on the BSE with volumes of 2.47 lakh shares.

According to brokers, the company is expected to bag export orders soon for its various textile products.

On these expectations, several investors - both retail and institutional - are purchasing the shares of the company.

Welspun India is a leading exporter of terry towel and some of the well-known global companies to which it exports include Wal-Mart and JC Penny.

When contacted company's official declined to comment on the orders.

Analysts said the Welspun India stock is on the `buy' list of several FIIs as after the removal of quota system from next year, companies such as Welspun would be the major beneficiaries.

Another reason for the interest in the stock is the company's Rs 575-crore expansion plan going on stream by the end of this year.

The company is enhancing capacity of terry towel, bed sheet and cotton spinning unit at Anjar in Kutch district, Gujarat.

Of the total cost of the project, Rs 400 crore would be funded by debt, Rs 125 crore from equity (mainly from ICICI Ventures equity stake) and the rest from internal accruals.

The expansion project is eligible for excise and sales tax exemption.

According to analysts, the profit margins from the expansion project are expected to improve on account of higher value addition and product mix.

More Stories on : Stock Markets | Textiles

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Global equities one step closer!

Reliance MF launches 2 schemes for NRIs

Bears prevail

Eastern Silk at all-time high on growth prospects

Welspun India gains on order talk

Pvt placement talk soon?

Guj Ambuja Cement: Outlook positive, buy October futures

Sustained selling pressure drives Sensex down

Dena Bank gets nod for 2nd public offer

Mahanagar Gas plans IPO before Dec 2005