20% Upper Circuit: Textile Stock Hits New 1-Year High; Large Deals In Jan 8th Session Fuel Bulls

Leading textiles manufacturer, Trident Ltd witnessed a huge rally on Monday, so much so that the stock price touched its 20% upper circuit and hit a fresh 52-week high. The stock scaled up sharply in the last minutes of the January 8th trading session as large deals in the open market fuelled bulls immensely. The consensus recommendation of analysts for Trident is BUY.

On BSE, Trident shares ended at Rs 48.37 apiece, up by 18.26% with a market cap of Rs 24,649.14 crore. While on NSE, the stock closed at its new 52-week high and 20% upper circuit of Rs 49.05 apiece.

The stock touched a new 52-week high of Rs 49.08 apiece on BSE in trading hours. This was also its 20% upper circuit.

As per Trendlyne, Trident witnessed a huge volume spurt to the tune of 45.47 crore equity shares in a day, which is 3.31x up from the average volume week of 13.73 crore shares.

Meanwhile, in the early trading session of January 8th, somewhat 18.16 equity shares exchanged hands on NSE at around 10.50 am. At that time, the stock saw up to 6.91 times surge in volumes on BSE. While the traded value of these equity shares aggregated to over Rs 812 crore.

Also, the chart on BSE, showed that in the last few minutes of trading hours before the closing, Trident recorded 2,689,773 equity shares exchanging hands on BSE at 15.14 pm, followed by 1,623,831 equity shares exchanging hands at 15.34 pm.

Overall, after the market close, BSE data showed that the traded quantity in Trident on January 8th was to the tune of 6,03,53,944 equity shares. While deliverable quantity was at 1,62,79,081 equity shares, 26.97% of the total traded quantity.

Meanwhile, on NSE, the total traded quantity stood at 45,46,68,901 equity shares in Trident, while 6,77,33,685 equity shares were deliverable quantity which was 14.90% of the total traded quantity.

The names of buyers and sellers were not known immediately.

In the last five trading sessions, Trident shares have zoomed by 32.4% on the BSE, and 34.2% on NSE.

The bullish trend in Trident comes after the company on December 29, which was the last trading day of 2023, announced that its existing capacity of the Yarn Business at Budhni, Madhya Pradesh, has been enhanced with effect from the same day.

With effect from December 29, 2023, Trident's yarn capacity addition was at 1,89,696 Spindles for which it made an investment of Rs 830 crore through term loan and internal accrual. Its existing yarn capacity stood at 5,89,248 Spindles, 7464 Rotors and 160 Air jets, while existing capacity utilisation was 82%.

The enhancement of yarn capacity is expected to strengthen the position of Trident in the textile sector. Additionally, the move enables Trident to leverage business expertise, capture business synergies, increase competitive advantage, and meet increased demand.

As per Trendlyne, the consensus recommendation from 2 analysts for Trident is STRONG BUY. EPS is expected to grow by 2.3% in FY24.

Some of the key factors for Trident stock as per Trendlyne are:

- Debt to Equity Ratio of 0.33 is less than 1 and healthy, implying that its assets are financed mainly through equity

- Price to Earning Ratio is 53.62, lower than its sector PE ratio of 75.51

- Return on Equity(ROE) for the last financial year was 10.51%, in the normal range of 10% to 20%.

- Promoter Share Holding stayed the same in the most recent quarter at 73.19%.

- Promoter Pledges are zero.

- Interest Coverage Ratio is 12, higher than 1.5. This means that it is able to meet its interest payments comfortably with its earnings (EBIT).

- Mutual Fund Holding remained the same in the last quarter at 0.05%.

Further, Trendlyne data revealed that Trident's weekly average delivery volume is 30.84%, while it is trading above 8 out of 8 SMAs, and above 6 out of 9 Oscillators in a bullish zone.

Disclaimer: The recommendations made above are by market analysts and are not advised by either the author nor Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.