ValuePickr Forum

Kitex Garments Limited

As per the management, couple of dispatches were delayed and hence did not show up in the numbers. The benefit of which will be seen in Q4. Still confident will deliver 25% growth for the next 2 years (not the first time of such confidence) as order book is full for the next 2 years. Rest of the questions will answered on the call.

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what is the source of this information?

An analyst (who was the first to cover the name) spoke to the management and shared this feedback.

The sentiments can improve after the concall. I have added more today as I see lot of value and adequate safety around Rs 375-Rs400. If I am proved wrong, I will exit as of now I strongly feel there are no fundamental changes in the business.

Please compare this with the case of KSCL . You will understand.

Rgds

IMHO

This is amazing

Kitex Garments Ltd has informed BSE that ET Now, Mumbai will be telecasting a first and exclusive interview on February 08, 2016 at 10.40 A.M in their show Hot Stocks anchored by Avanne Dubash and Kamiya Jani following the announcement of Q3FY16 financial results in our Board meeting held on January 25, 2016.

http://www.bseindia.com/corporates/anndet_new.aspx?newsid=4395fe29-7368-4243-b0f7-2e04e5dc4e90

Disclosure . Not Invested

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Writing on this Kitex thread almost after 18 months and after too much discussion have already happened on this story …

I would have few humble points for fellow travellers in investment journey… It is not suggestion or advice but just sharing my own thought process…

  1. Kindly check your thesis for investing at the time of investing… Especially what is your initial expectation from the company and from the stock … Here what I mean is what growth of earning you expect (intrinsic to the company) and what growth of price you expect (it can be PE rerating, market sentiment, euphoria, bandwagon effect etc and to a large extent extrinsic variable)?

  2. If the price goes berserk ahead of the underlying growth of the company or if market starts giving huge premium to its future possibilities and you achieve your price target much ahead of your expectation then what you should do?

I feel, in spite of all the negative and positive issues involved in Kitex story and discussed ad nauseum in this thread, Ms. Market at some point gave 45 + trailing PE to Kitex for reasons and quirks best known to herself. So, it was clear that it was disregarding the negatives and only focussed on the positives. So, isn’t it obvious that Ms. Market would, at adverse time, act very negatively and very ferociously?

If you look into my initial investment note (in a doc file available on this thread), I rated Kitex at a 30% compounder for 3 years and hence my expectation was Kitex to double in about less than 3 years but never expected it to treble in price in a span of one year on the basis of PE rerating from stable to unstable range (not from underrated / undiscovered level to stable range) … Whatever wonder they may be doing, whatever great products they may be having, whatever great the management might be … To me, no business unless those which work on Networking Effect (Power Law) can match the expectation created by the market on Kitex in the first place.

To me the sell time came when I found … Kitex went beyond my initial thesis without any new development or insight, and the price action on the stock went on a decline from the euphoric high … I know that I don’t know almost anything about how Ms. Market behaves … So for me every stock has a price to buy and every stock has a price to sell … And every stock has an opportunity cost for holding …

So, even if there were no negative news, no Cash Balance issue, no CFO resignation, no political adventurism by the management, no slackening of growth I would have anyway sold it off at the valuation which Ms. Market offered me 6 months back because my initial thesis was only for 30% compounding and no fantastic things happened to change that hypothesis unless there is egregious fraud as mentioned by some valued members elsewhere here.

Another point, I feel, at times, putting too much effort to analyse a stock gives a kind of emotional attachment to it … as if I am being rewarded or I should be rewarded for my hard work!!! Hard work is sine qua non for making even for Rs. 100/- investment but price action in market also tells a very important story and I always think it is critical to look into the price action and take appropriate course correction before portfolio gets seriously dented.

Lastly, imagine a situation that Kitex stock price didn’t move at all for last 1 year and remained at about Rs. 375/- - Rs. 400/- level … Would you all have discussed the issue the same way as is being done here? Now everything in Kitex looks dark to many people … Is it because we entered a dark room from a scorching sun? If it hovered around this level, possibly we would have adjusted to the darkness of the room and felt very happy if sunlight entered even through a small hole :slightly_smiling:

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Kitex Garments - Updates

With reference to the earlier letter dated January 28, 2016, Kitex Garments Ltd has now informed BSE that ET Now, Mumbai will now be telecasting a live telephonic interview on January 30, 2016 at 13.00 IST in their showNews First- Weekend Edition anchored by Avanne Dubash (Instead of February 08, 2016 at 10.40 A.M as already informed) following the announcement of Q3FY16 financial results in the Company’‘s Board meeting held on January 25, 2016. Please treat the Company’'s earlier communication of January 28, 2016 as cancelled.

http://www.moneycontrol.com/stocks/stock_market/corp_notices.php?autono=2735201)

It is good that they made it public. Some traders linked to these media houses take undue advantage of advance info. on who is coming on TV with what sort of questions getting answered.

Disc: No stakes

Hello All,

Could you explain what does this mean ? "Please treat the Company’'s earlier communication of January 28, 2016 as cancelled."
Are they going to re-announce results ? or live telephonic interview has been pre-poned ?

On Jan 28 they announced : http://www.bseindia.com/corporates/anndet_new.aspx?newsid=4395fe29-7368-4243-b0f7-2e04e5dc4e90

“Kitex Garments Ltd has informed BSE that ET Now, Mumbai will be telecasting a first and exclusive interview on February 08, 2016 at 10.40 A.M in their show Hot Stocks anchored by Avanne Dubash and Kamiya Jani following the announcement of Q3FY16 financial results in our Board meeting held on January 25, 2016.”

Now they cancelled the TV appearance and will just do a telephonic one.

Given that there’s already been a lot of valid bullish and bearish arguments raised by people on the future prospects of Kitex, I’ve nothing much to add except that I’m bullish.

However, that doesn’t mean I don’t have my fair share of concerns.

The no.1 amongst them is the management integrity. I sort of overlooked the attitude of the CEO after Q2 results whilst answering the queries on the cash and then likened the revenue guidance growth with the Avanti management (who seemed recklessly bullish to me but seem to be walking the talk).

But such flat results of Q3 are only increasing the questions on the management and with the possibility of the management guidance being met seeming impossible, my decision to remain invested hinges a lot on this concall. I always believe in - innocent until proven guilty. However, any type of behaviour to avert/divert important questions or indirect responses would be a deal-breaker for me.

It is good to see them proactively communicating any public interviews. It may also appear to be triggered as a ‘face-saving’ exercise after the market cap has been consistently hammered over the past few days. I see a telephonic TV interview on 30th Jan as a much better outcome than a F2F interview a week later. Much better to clear the air quicker than letting any rumour mongering run amok.

Let the music begin :smiley:

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One of the investment checklists i have is avoiding companies whos ceo comes on business channels very often. Found it very effective. I am talking about smallish companies ( say <5k market cap). not generalizing it though. but it works :slightly_smiling:
this may be an off topic. you guys should listen to eclerex q3 con-call. in the opening remarks itself, the ceo warned about fy17. and also look how they answer various other questions, possible threats etc. remember this is on a quarter where reported stellar sales and profit growth. had they not done, people would have extrapolated it taking the stock price high. what a great management.
Discl: Never held kitex or eclrex.

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  1. I’m not sure how your post is relevant to Kitex as I’m hardly aware of many TV interviews it’s CEO may have given in the recent past.
  2. Not a good checklist criteria IMHO - Check out CanFin’s performance and frequency of the MD appearing on CNBC.

Kitex Garments Ltd has informed BSE that the Company has received the “JOCKEY Debra S Waller Award for Great Partnership 2015” at the just concluded vendors meet in Hong Kong.

  1. you can check the last few quarters. (ET now )
  2. as i said, i am not generalizing it. anyways, this has worked me. i am not recommending this strategy to others.

Tried dialing into 11:00 AM conference call hosted by MOSL but couldn’t get any operator.

It’s just me or some other folks got same issue?

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I too have same issue

In concall- they are saying debt has gone down. converted 10 MUSD to pay back debt. and 20%-30% growth next year.

They missed shipments because of delayed Winter and so they missed top line

670 -730 cr next year

Hello Nil, I couldn’t join the conference call. I tried all the numbers but no luck. Am I missing any trick here?

Try now. I just got connected