Trident shares hit 5% lower circuit; Motilal Oswal sees over 15% upside in textile stock that surged nearly 350% in one year

Shares of Trident Limited touched 5 per cent lower circuit on Monday to Rs 58 per share in Monday's intraday trade on the BSE. However, brokerage firm Motilal Oswal is bullish on this textile share and believes that it can gain 15 per cent CMP of Rs 64.  

Trident shares were seen making recovery after hitting the lower circuit as the shares gained 1 per cent to trade at Rs 62.25 per share around 10.15 am.  

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Despite recent corrections, technical data of the stock shows that the scrip gained 17% in one month, 53% in three months, above 240% in Six months and whooping 340% in a year.  

Assigning a 'Buy' rating, Motilal Oswal is of the view that growth opportunity with the normalization of business operations as well as an improving demand outlook will benefit this counter.  

It also highlighted that the management has undertaken several initiatives to reduce its debt commitments, including reducing working capital through the retention of cash accruals, implementing other measures to reduce the CTC cycle, and building up its cash reserves.  

"Trident (TRID) reported a strong performance in the Home Textile and Paper segments, driven by robust demand with the easing of pandemic woes. The demand trend in Home Textile is expected to continue, with major export demand bouncing back in FY22E. We value TRID at 25x FY24E EPS to arrive at our TP of INR73. We maintain our Buy rating," it said in its report.  

The US and Europe are major importers of home textile products globally. The industry saw a rebound in sales due to pent-up demand. This has led to strong demand in 3Q, and the momentum is expected to continue in 4QFY22E as well. 

Increased global awareness about health and hygiene and emphasis on working from home are the growth drivers for home textile products – as home décor is the new ‘global favorite.’ 

Trident Limited is a leading manufacturer of Yarn, linen, wheat straw-based paper, chemicals and captive Power. The company claims to have clientele in around 100 countries and has manufacturing facilities in Punjab and Madhya Pradesh.