Up 5,300% in 10 years! Religare is betting on this multibagger stock for short term

Shares of KPR Mill have delivered over 5,300 per cent return to its long-term investors in the last 10 years. The multibagger stock has zoomed over 110 per cent in the last two years and over 400 per cent in the last five years. It has recovered over 39 per cent from its 52-week low of Rs 479.55, hit on December 26, 2022.

According to Religare Broking, KPR Mill has been trading in a long-term uptrend since 2014. The stock witnessed more of a time-wise correction, which shows noticeable buying interest during the corrective phase.

"In line with past instances, it has traded with the corrective bias for the last one and a half years, after the phenomenal surge from 160 to a new record high of 769," it said.

"It has recently witnessed a breakout from a consolidation range of 480-625 and is likely to retest the record high soon. We thus recommend creating fresh longs in the mentioned range," Religare Broking added.

Commenting on the FY23 performance, The company said that it commenced FY2023 with a positive mode of growth and profitability. But the steep increase in cotton prices coupled with the resultant lower yarn realization impacted the margin. However, the unstinted support from the garment segment and our inherent strengths enabled KPR to repeat its performance level despite the challenges.

"Now, the cotton prices started stabilizing, the textile industry is optimistic about the government policies and FTAs. As reported earlier, to improve our performance further, we implemented a certain modernization and expansion plan at a total outlay of about Rs 500 crores. The setting of above exclusive vortex spinning mill at an outlay of Rs 100 crores will be completed during the current financial year. The rooftop solar power plant at Rs 50 crores is completed and commissioned. Processing and printing expansion at a cost of Rs 50 crores will be completed in the first half of this financial year. Ethanol capacity expansion at Rs 150 crores will be commenced before the coming sugar season 2023-24, that is by October this year," Religare Broking said in its Conference Call.

"We spent around Rs 100 crores on modernization to improve the quality of the product so as to meet the customers’ requirements. With this, we have spent around Rs500 crores in the last one year. The project will be completed by the end of this year with around Rs 500 crores investment. Geopolitical tensions, high inflation, rising commodity prices and interest rates impact many economies. The textile business is also facing challenges. So, we are watching the market continuously and will consider any further expansion plans accordingly," the company added.

K.P.R. Mill Limited is one of the vertically integrated apparel manufacturing companies in India with a diversified business focus spanning Yarn, Fabrics, Garments and White Crystal Sugar. It manufactures a product range of textile varieties such as Readymade Knitted Apparel; Fabrics; Compact, Melange, Carded, Polyster and Combed Yarn.

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