Thread by @TechnoFunda6

After #Kitex Now comes #VishalFabrics ...

A Small-cap stock that can become 2X in medium term.

CMP – 107.40 (11/1/2022)

Sectoral Tailwinds, Promoters Buying, Breakout ...

(Must read 🧵Thread for Investors !)

@saditya10p Views Invited 🙏

#TechnoFunda #ShareMarket

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A flagship company of the Chiripal Group, #VishalFabrics Limited is a leading denim manufacturer.

Company has been promoted by Shri Brijmohan Chiripal who has nearly three decades of experience in the fabric and yarn business and marketing of knitted apparels.

#TechnoFunda

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Chiripal Group, is a leading manufacturer and exporter of Textile and BOPP Film products in India with a group turnover of more than Rs. 6,000+ crore.

Other Listed companies of the group - #NandanDenim Ltd. and CIL Nova Petrochemicals Ltd.

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With over 35 years of experience, #VishalFabrics has state-of-the-art manufacturing facility, with a capacity of over 100 MMPA, to deliver premium fabrics that match global standards.

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In past, in Sept 2020, #VishalFabrics was fined Rs. 1 Crore & was also issued closure notice by Gujarat Pollution Control Board.

Stock collapsed from 245 to below 40 levels in 3 months

🌟(Significant Risk Factor. Never allocate more than 5 % of portfolio to such stocks)🌟

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Client List of #VishalFabrics includes - H&M, Zara, The Roadster Life & Co., GAS, Emporio Armani, Lee, Wrangler, Killer, Calvin Klein, Levi's, Diesel, Tommy Hilfiger, Being Human, etc.

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Company's manufacturing facilities are located at Dholi Integrated Spinning Park, in close proximity to cotton growing belt in Gujarat.

#VishalFabrics #TechnoFnda #Investing #Trading

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In order to backward integrate its operations, #VishalFabrics established entities in spinning, dying, weaving and processing, which reduces company's costs and helps in higher profitability against its peers.

#TechnoFunda #Investing #Trading

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A key ➕ factor of this company is that it has long standing relations with clients due to which it holds a strong market position.

#VishalFabrics #TechnoFunda #Investing #Trading

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Sept Quarter Results of #VishalFabrics were good

Q2FY22 vs Q1FY22 vs Q2FY21

Revenue👉 400 Cr vs 295.02 Cr vs 219.79 Cr

PBT 👉 26.74 Cr vs 13.89 Cr vs 2.91 Cr

PAT 👉 19.77 Cr vs 10.24 Cr Cr vs 2.48 Cr

EPS 👉 3.00 vs 1.55 vs 0.57

@nid_rockz Views Invited 🙏

#TechnoFunda

🔟

Promoters hold 69.75 %
FII's hold 5.64 %

Retail investors hold around 13.5 % ~ 90 lakh shares.

Promoter pledge has reduced in last few quarters.

In August 2021, promoters increased their stake by 2.20 %. Buying was done at an average price of 115 - 125.

#VishalFabrics

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Mcap Full (Cr.) - 734.12
Mcap FF (Cr.) - 220.24
Book Value - Rs. 40.17

ROCE - 10.1 %
ROE - 7.06 %

ROCE & ROE are low. But can improve with overall improvement in textile sector.

#VishalFabrics #TechnoFunda

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🌟Investment Rational🌟

India currently boasts denim manufacturing capacity of approx 1,500 MMPA. Industry has been growing at a CAGR of 9% over the last 5 years and expect more growth in coming years.

Source : Company AR & Website.

@caniravkaria @saditya10p

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✅Favorable government policies for #Textile Sector
✅Export promotion policies for Textiles Sector
✅100% FDI is allowed in Textile Sector under automatic route.
✅ PLI Scheme - Rs. 10,683 crore for 5 Years.

#VishalFabrics #TechnoFunda #ShareMarket #StockMarket

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🌟#TechnicalAnalysis of #VishalFabrics🌟

Charts of Vishal Fabrics look promising...

Stock is trading above all short term SMA's.

Breakout with Very High Delivery & Traded Quantity Yesterday.

Weekly & Daily Chart Attached Below in Thread

#TechnoFunda #Trading #Investing

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Weekly Chart of #VishalFabrics shows good momentum.

Double Bottom Neckline Acted as Support.

Falling Resistance Line became Support Line.

Resistance at Rs. 130.

Breakout can take stock to higher levels in medium term.

#TechnicalAnalysis

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Daily Chart of #VishalFabrics shows Breakout from Symmetrical Triangle.

Resistance at Rs. 130.

Breakout can take stock to higher levels in medium term.

SL for Traders can be around 85.

#TechnicalAnalysis

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#VishalFabrics Eyes Rs 2,000 cr Top-line in Next 2 Years

Source -

indianretailer.com/news/vishal-fa…

#TechnoFunda #Investing #Trading

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In case of such Small Cap Stocks with Past Problems, one cannot go for Long Term BUY & HOLD Approach

One needs to continuously TRACK & MONITOR developments related to Company

& Never Allocate Large Amount ( in % terms of your capital) to such stocks.

@caniravkaria Views

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Disclaimer : This is not a stock recommendation on #Vishalabrics. Just a case study for educational purpose explaining #TechnoFunda!

Our team members may be personally invested in the stock hence their opinion may be biased.

Consult Financial Advisor before Investing!