Why Kitex Garments surged 13% in two days
Did you Know? Stock score of Kitex Garments Ltd moved down by 1 in a month on a 10-point scale. View Latest Stock Report »
New Delhi: Shares ofhave been on a roll recently. The counter has surged over 13 per cent in just two sessions on the back of a couple of reasons.The Telangana State government has extended an invitation to Kitex Garments for setting up an apparels unit in the state. Telangana Government has cited its lucrative Textiles and Apparels Policy.A communication from the Kitex group claimed here that Telangana Industries Minister KT Rama Rao sent out an invitation to the Kitex company Tuesday evening promising attractive incentives.Also, the labour department of the government of Kerala has withdrawn the show cause notices issued to the company on the minimum wage issue.Shares of Kitex Government surged 13 per cent in the last couple of days. The counter was trading at 6 per cent higher at Rs 123.40 on Friday. BSE Sensex was trading 113.25 points or 0.22 per cent lower at 52,455.69 at the same time.On June 30, the world’s second largest manufacturer of kids apparel announced to withdraw Rs 3,500 from Kerala alleging an incessant witch hunt and harassment by state government officials.The apparels and accessories manufacturer reported a 49.3 per cent decline in the net profit Rs 9.73 crore in the March 2021 quarters, as against a net profit of Rs 19.22 crore in the same quarter previous year.
Kitex enters Telangana with initial investment of Rs 1,000 crore
Sabu Jacob, Chairman, Kitex Garments
Kerala-based Kitex Garments, one of the leading global manufacturers of kids apparel, has entered Telangana with an initial investment of Rs 1,000 crore, state Industries and Commerce Minister KT Rama Rao announced on July 9. The announcement comes days after the company decided to withdraw its investment plan in Kerala citing the “harassment” by state officials.
Kitex, as part of the deal with the Telangana government, would be setting up its factories at the Kakatiya Mega Textile Park in Warangal district.
“Delighted to announce the entry of KITEX group, world’s 2nd largest manufacturer of kids apparel into Telangana with an initial investment of Rs 1,000 crore. They’ve chosen KMTP, Warangal for their factories. My gratitude to Mr. Sabu M. Jacob, MD of KITEX group on a quick decision,” Rao tweeted.
KT Rama Rao and other state officials with Kitex representatives.
Kitex MD Sabu M. Jacob also issued a statement to confirm the company’s agreement to invest Rs 1,000 crore for the textile project in Warangal.
“In principle, the Kitex Group has agreed upon a Phase- I investment of 1,000 crores within a span of two years in the textile industry for the project ‘Textile Apparel’ in the Kakatiya Mega Textile Park in Warangal,” Jacob said.
“This investment will generate an employment of 4,000 jobs in the state of Telangana,” he added.
KT Rama Rao and Kitex officials finalised the investment agreement on July 9.
Also Read | Kitex controversy is a sign Kerala is yet to shake off its anti-industry image
Kitex’s entry into Telangana is an apparent loss for Kerala. The company was earlier set to invest Rs 3,500 crore in the coastal state, but was forced to reconsider its decision after being allegedly subjected to frequent inspections and raids by the officials from the state departments.
The alleged raids disrupted the company’s functioning and Jacob went on record to state that he is considering diverting the investments to another state.
“I have said I am not going to implement it in Kerala but I am open to taking it to other states,” he had told Moneycontrol.
“There have been 11 raids on the factory in the space of a month (in Kerala). It is sheer harassment. Officials from various departments such as labour, health, factory and boilers, pollution control, besides the police and the collector have conducted inspections. They come in hordes and question the workers including women and ask for their names and addresses. They didn’t find any discrepancy,” Jacob said, marking his disappointment towards the government of Kerala.
Kitex Garments plunges 10%. Here’s why
Did you Know? Stock score of Kitex Garments Ltd moved down by 1 in a month on a 10-point scale. View Latest Stock Report »
NEW DELHI: Shares oftanked as much as 10 per cent during early trade on Wednesday on the back of multiple reasons, including a poor set of numbers in Q4.The world’s second largest manufacturer of kids apparel has announced to withdraw Rs 3,500 crore investment from Kerala alleging harassment by state government officials. In the meantime, the apparels and accessories manufacturer also reported a 49.3 per cent decline in net profit of Rs 9.73 crore in March 2021 quarter, as against a net profit of Rs 19.22 crore in the same quarter previous year.The company’s shares plunged over 10 per cent to Rs 111.35 on Wednesday. However, it recovered to Rs 114.95 at 9.45 am. BSE Sensex was trading at 52,638.54, 88.88 points, or 0.17 per cent, higher at the same time. The counter settled at Rs 124.15 on BSE on Tuesday.Revenue from operations shrank 23.65 per cent to Rs 111.71 in the quarter ended on March 31, 2021 as against an income of Rs 146.32 crore in the same quarter a year ago.The company had signed a memorandum of understanding with the Kerala government. The plan was to open an apparel park in Kochi and establish industry parks at Thiruvananthapuram, Kochi and Palakkad. The management said that various units of Kitex were raided 10 times by officials from various departments during the past one month.Kitex Garments have underperformed BSE Sensex in the year 2021 so far. The counter has gained only 4 per cent, compared to a 10 per cent rally in the benchmark index.For the full financial year 2020-21, the net profit of the company fell 45 per cent to Rs 59.9 crore as against Rs 108.67 crore in the previous fiscal. Revenue from operations slipped 40 per cent to Rs 465.49 crore during the period under review.The company board has recommended a dividend of Rs 1.50 apiece for shares with a face value of Re 1 each, subject to shareholders approval.