Shares of Kitex Garments hit the 10% higher circuit at Rs 164.10 on BSE this morning after the company announced that the Telegana government approved its expansion plan.
“The proposal submitted by Kitex Garments to the Telegana government for an expansion plan has been approved,” the company said in an exchange brief. The government decree will be published in a few days, he added.
The raison d’être of the expansion plan is the ease of doing business, using better logistical and infrastructural facilities; government incentive and subsidy programs, proximity to sources of raw materials; reduction in the cost of labor and its availability and overall reduction in costs and therefore increase in long-term profitability.
From 9:30 am; a total of 210,000 equity shares had changed hands on the NSE and ESB. There was a pending combined buy order for 420,000 shares, according to stock exchange data.
On July 13, 2021, Kitex Garments said the company had agreed in principle to invest Rs 1,000 crore to set up garment manufacturing facilities in Telegana State, which would create 4,000 job opportunities. additional over the next 2 years. “With the government’s liberal policies, the availability of raw materials and various incentives offered by the state, the company hopes to reduce its operating costs, shorten the payback period and generate profits,” the company said.
However, the stock subsequently declined and ended at Rs 149.20 on Wednesday September 1, a 34% price correction from its 52 week high of Rs 224.45 reached on July 13, 2021. .
Kitex Garments specializes in manufacturing and exporting garments. The company manufactures different types of clothing such as shirts, pants, jackets, indoor wear and outerwear. The company also exports baby and children’s clothing and jackets to the United States.
“As the company is active in the baby clothing business, we expect the business to grow at a good pace and it is also possible to get new good orders from existing / new buyers in the region. whole world in view of the trade war between the United States and China. We are constantly monitoring the current situation to seize opportunities and also ready to meet any challenges, ”said management in the annual report for fiscal year 2020-21.