Shares of Trident Ltd gained 8.05% on Tuesday’s early trades to reach an intraday high of ₹ 32.20 apiece after the company released a business update. Its shares were trading at 31.60, up 6.04% at 01:42 PM.
Trident Ltd is the flagship company of the Trident group and is a leading manufacturer of yarn, bath linen, wheat-straw-based paper, chemicals and captive power. In addition, it manufactures paper and chemicals like battery-grade sulphuric acid.
Trident informed the exchanges that for the month of March, It produced 3,556 metric tons of bath linen, 3.12 million tonnes of bed linen and 8,675 metric tonnes of yarn. Moreover, it produced 12,010 metric tonnes of paper and 9,378 metric tonnes of chemicals.
About two weeks ago, the company’s promoter Madhuraj Foundation bought 1.23 crore equity shares of the company in a block deal aggregating to around ₹ 31.89 crores.
Brokerage firm Motilal Oswal has a buy rating on the stock with a target price of ₹ 40. This implies an upside of 26.58% as compared to the company’s current share price of ₹ 31.60.
In a report last month, JM Financial said that Trident continues to remain well placed as structural drivers of increased market share in the US, US’ ban on Xinjiang imports, duty reimbursement by GOI and market share gain on China+1 theme are likely to drive earnings going forward. However, it said that the near-term demand environment for the textile segment is expected to remain muted given recessionary fears and inventory pile-up at retailer levels.
Trident is a small-cap company with a market capitalization of ₹ 14,919 crores. It has an ideal return on equity of 23.25% and an ideal debt-to-equity ratio of 0.31. The company’s shares were trading at a price-to-earnings ratio of 30.33, which is lower than the industry P/E of 46.64, indicating that the stock might be undervalued as compared to its peers. It has a dividend yield of 1.81%
Written by Simran Bafna
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