Mega Textile Parks - Stock to watch RSWM and ORBTEXP

Mega Textile Park Scheme

PM-MITRA - Mega Integrated Textile Region and Apparel

On 6-Oct-2021, the Union Cabinet of India has approved setting up of 7 New Mega Textile Parks in different parts of India in next 5 years with a total outlay of Rs 4,445 crore. This scheme is announced under PM-MITRA (Prime Minister – Mega Integrated Textile Region and Apparel) scheme with an aim to put India in global textile diaspora. It will also help to position India as a fully integrated, globally competitive manufacturing and exporting hub for the textile sector.

The PM-MITRA parks will have the below facilities:

incubation center and plug-and-play facility
developed factory sites
roads
power
water-and-waste-water system
common processing house
design centers
testing centers
workers’ hostels and housing
logistics park
warehousing
medical
training and skill development facilities for the workers

In order to give more fillip to Textile sector, the Government has made 2 major announcements:

Rs. 10,683 crore Production-Linked Incentive (PLI) scheme for man-made fiber segment apparel
Rs.300 cr. Competitiveness Incentive Support (CIS) to each PM-MITRA park for early establishment of Textiles Manufacturing Units. This CIS support will be given till the companies are able to scale up production and be able to establish their viability.

Objective:

to put India in global textile map
to take the textile export from current $44 billion to $100 billon export in coming 5 years
to enhance competitiveness in the textiles industry, by helping it in achieving economies of scale
to create huge job opportunities for millions of people

Key Benefits:

India will attract FDIs into Textile Sector
Boost Textile Exports from India
Generation of Employment Opportunities (initial estimation is around 21 Lakh Jobs)
Integrated facilities at one location will enhance quick turnaround time and reduce logistics cost of the industry.

Impact of this development on Equity Market

Textile and allied companies will be direct beneficiaries to this initiative taken by the government. As mentioned in our earlier blog (Easing of Pandemic-Led-Restrictions) where indication was given to keep watch on the Textile sector post Covid lockdown scenario, not only the companies who are directly into garment manufacturing will be benefited, it will also give impetus to allied segments like Yarn Machinery, Processed Garment, Fabric Production, Fabric Chemicals, Retail Outlets, etc.

Stocks to be Kept in Watchlist:

We are recommending the below 2 stocks which are trading at almost bottom level and can be kept in watchlist. Technical charts of both the stocks are given below for better understanding the upward potential.

1. ORBIT EXPO -

The company manufactures and exports Novelty Fabrics and Madeups
Manufactures Fancy textiles that find its uses in Christmas craft,
Ladies dress material segment and home textiles
Manufactures of products range which includes Metallic, Faux silk, Jacquards, etc.
Profit was consistent during pre-Covid period
Company aims to regain the momentum ease of lockdown led restrictions.
Target T1 may be kept at 120 range, T2 at 10 and T3 near 220.
This is trading at bottom level, so Stop Loss around 20 points, a multi-bagger move is expected.

2. RSWM Ltd.

Deals with Yarn, Fabircs and Garments
One of the largest producers and exporters of Polyester based yarns
Exports yarn, fabric and garments to over 60 countries across Australia, Europe, Gulf regions.
Profit has increased post pandemic.
Target T1 can be put near 500 and T2 at around 680