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Wednesday, Aug 31, 2005

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Expansion plans fuel rally in Ginni Filaments

Virendra Verma

Mumbai , Aug 30

SHARES of Ginni Filaments Ltd (GFL), a textile company, are on an upward move due to the commencement of the commercial production of the knit fabric by the knitting and processing unit.

Analysts said the new unit is likely to add to the sales and profits in the coming quarters.

The stock price on Tuesday rose 9.82 per cent at Rs 48.10 on BSE with volume of 17.98 lakh shares and on NSE it closed at Rs 48.05, up 10 per cent with volume of 18.78 lakh shares. In the last one month, the stock price has risen more than 90 per cent.

Brokers said the company set up a knitting and processing unit with 10 tonnes per day capacity; commercial production started in July this year.

Most of the production from the new unit is expected to be exported. The expectation among traders is that Cotton Ella of Italy, a leading name in innerwear in Europe, may buy the output. GFL currently sells its knit fabric to Cotton Ella.

"This development, along with export potential in other developed markets, is expected to provide huge growth opportunities for the company," said an analyst with a domestic broking firm.

The spinning capacity is being increased from 42 tonnes per day to 60 tonnes per day. Commercial production of the increased capacity is expected from April 2006 and this would also add to the bottomline and topline.

The company plans to set up a garment unit near Delhi for the manufacture of innerwear and outerwear. Installed capacity of the unit will be 5 million garments per annum. Commercial production is expected by April 2006, resulting in incremental benefits for the company.

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