Hero MotoCorp rises on new launch, BEML shares gain, textile companies weaving gains & more

NIFTY50: 19,342 ▲ 36 (+0.19%)
SENSEX: 65,075 ▲ 79 (+0.12%)

• Benchmark indices rose marginally after a range-bound trading session
• In all, 37 of the NIFTY50 stocks closed in the green
• Soybean futures fell from 4-week high to $13.9 per bushel amid ease in supply concerns

Among the NIFTY sectoral indices, Realty (+1.6%) and Metal (+1.2%) were the top gainers, while PSU Bank (-0.4%) and FMCG (-0.3%) were the top losers.

What’s trending

⭐ Hero MotoCorp rises on new launch

Shares of the leading two-wheeler maker rose 1.8% after it announced the launch of its new premium motorcycle Karizma XMR. The company management said that it is building its portfolio in the premium segment and aims to launch more products in this fiscal year. This launch comes on the heels of the Harley-Davidson X440, which the company developed in collaboration with US motorcycle maker Harley-Davidson.

⭐ BEML rallies on strong order book

Shares of the PSU firm BEML rose 10% as the company said it has a strong order book of around ₹16,000 crore for the current fiscal year. This comes after the company reported multiple major order wins in August. This includes an order from Bangalore Metro Rail Corporation (BMRC) for the supply of rolling stock valued at approximately ₹3,177 crore. The company is also targeting tenders worth ₹7,000 crore from Mumbai Metro, Chennai Metro, and Patna Metro.

⭐ Gulf Oil jumps on acquisition 

Shares of Gulf Oil Lubricants rose 3% after the company acquired a 51% controlling stake in Tirex Transmission, a manufacturer of DC fast chargers for EVs. Tirex caters to a diverse clientele, including PSUs, charge point operators (CPOs), automotive OEMs. It offers a range of chargers available for all vehicle types, including e-Buses. Once the acquisition is complete, Tirex will become a subsidiary of Gulf Oil Lubricants.

⭐ Gensol Engg soars on order win

Gensol Engineering shares were locked in the 5% upper circuit after the company secured its maiden international order. It bagged two solar projects in Dubai worth ₹101.6 crore with a total capacity of 14 MWp. As part of the deal, company will design and implement these solar projects in upcoming months.

In Focus

Textile companies weaving gains

Leading textile companies in India are weaving big gains for investors. Shares of Gokaldas Exports, Arvind Limited, Himatsingka Seide and others have jumped between 20% to 37% this month. Let's unravel the key factors behind this rise.

Industry could see restocking demand

Global retailers such as Walmart, Target and TJX have reported lower inventory in recent quarters. This is mainly due to strong comparable sales amid healthy consumer demand. Lower inventory level is a positive for the Indian textile industry as they could witness restocking demand from global clients. 

In fact, the management of Gokaldas Exports said they expect an improvement in the demand situation from the second half of FY24. Besides, the upcoming festive season could trigger a demand revival in the domestic market. 

Export market share is rising 

The China plus one strategy adopted by global players is playing out well for the domestic textile industry as Indian exporters are gaining market share in the United States and other countries. For instance, India’s share in export of cotton sheets to the US increased from 52% in 2022 to 59% in 2023. This gain has come at the expense of China. 

Additionally, Indian government's talks with the UK and Eurozone on free trade agreement (FTA) are progressing well. The establishment of an FTA with these key markets will enable duty-free exports and enhance India’s competitiveness. It is also expected to drive earnings growth for the textile industry.    

Cotton prices have fallen

Other than this, moderation in cotton prices from over ₹1 lakh per candy (1 candy = 356 kg of cotton) in August 2022 to current ₹59,800 per candy is favourable for the industry. Declining cotton prices could lower raw material expenses and improve profitability for textile players.

Guided by these changes in industry fundamentals, Indian textile stocks are witnessing a boom. But how long will this party last? It all depends upon how major retailers like Walmart and Target perform as well as their demand outlook.

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