Shares of this smallcap company surged around 8 percent in Tuesday’s trading session after HDFC Mutual Fund acquired a 1.03 percent stake in the company through block deals on Monday. In one year, the stock has delivered a multi-bagger return of 175 percent to its shareholders.
Price Movement:
With a market capitalization of Rs. 3,563 crores, the shares of Pearl Global Industries Ltd started Tuesday’s trading session on a higher note at Rs. 770.85 compared to its previous close of Rs. 759.95. During the trading session, the shares hit a high of Rs. 829, gaining around 8 percent, also recorded as the company’s fresh 52-week high and are currently trading at Rs. 813 apiece.
What Happened:
As per the BSE block deals, one of the prominent mutual fund houses, HDFC Mutual Fund has bought around 4.47 lakh equity shares, i.e., equivalent to 1.03 percent of paid-up equity in the multinational clothing manufacturing company at an average price of Rs 731 per share.
However, Investor Sanjiv Dhireshbhai Shah, who owned a 7.56 percent stake in Pearl Global at the end of the June quarter, was the seller in that transaction, having sold 2.77 lakh shares.
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Financials:
Looking at the company’s financial statements, the revenue zoomed by 25 percent from Rs. 704 crores during the December quarter to Rs. 877 crores in the March quarter. In addition, the net profits surged by 44 percent from Rs. 34 crores to Rs. 49 crores during the same timeframe.
Recent Developments:
Earlier, On Monday, the company also launched a Qualified Institutional Placement (QIP) through which it intends to raise funds. The floor price for the QIP has been fixed as Rs.748.68 per share.
Prominent Investors:
According to the BSE data, Ace Investor Mr Mukul Agrwal, entering the stock in September 2021, currently holds 15 lakh equity shares equivalent to a 3.44 percent stake in this company. The current holding value of his investment amounts to Rs. 123.1 crores.
Future Outlook:
The company is planning to invest Rs. 500 to 550 crores in the next four years. Further, Pearl Global Industries intends to prioritize top-tier customers to drive revenue growth, while also expanding its base among second-tier clients and acquiring new customers.
Moreover, the company has set an ambitious target to achieve a revenue of Rs. 6,000 crores by FY’28 through organic growth and capacity expansion.
Important Financial Ratios:
In terms of key financial metrics, the company reported a return on equity of 21.79 percent and a return on capital employed of 25.03 percent for the period spanning FY23-24. Additionally, the net profit margin stood at 4.92 percent during the same timeframe.
Company Profile:
Incorporated in 1987, Pearl Global Industries Limited (PGIL) is a garment exporter, manufacturing from multiple sourcing regions within India and countries within South Asia. The product range includes knits, woven, and bottoms across men’s, women’s, and kids’s wear segments.
Written by Vaibhav V Patil
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