This week is marked by RBI policy on October 4. MPC is expected to reduce interest rates by 25-40 bps. Auto sales numbers are expected to be week. The latest move by US to consider restricting market access to Chinese companies is likely to escalate the US-China trade war.
Trident is the pick of the week. 80 percent of its sales come from home textiles and rest from paper with branded EBITDA margin of 20-22% on annual basis. It will be a big beneficiary on export opportunities from US in wake of escalating US-China trade war. Trident posted a net sales of 13,012 crore in Q1, EBITDA margin of 23.2 percent. The expansion of EBITDA margin was driven by improvements in volume growth for both bed and bath linen. The revenue breakup for Q1 FY20 has been in the ratio of 25:56:19 for yarn, textile and paper respectively against 34:47:19 for Q1 FY19 which is indicating a drastic shift to value added products. The company is undertaking expansion in yarn segment at Madhya Pradesh at a cost of Rs 140 crore, said Pankaj Bobade, Head of Fundamental Research, Axis Securities.
