K.P.R. Mill Ltd. is a diversified corporate entity actively engaged in multiple sectors, including textiles, sugar, power generation, automobiles, education, and ethanol production. The company also ventures into retail with its proprietary brand, showcasing a robust portfolio of businesses. Over the years, K.P.R. Mill has established itself as a key player in the Indian textile sector, leveraging innovation and operational efficiency.
Market Performance and Stock Analysis
The company has demonstrated impressive stock market performance over varying timeframes, reflecting investor confidence and business stability.
- 1-Day Performance: 6.1% gain
- 1-Week Performance: 9.1% gain
- 1-Month Performance: 16.2% gain
- 6-Month Performance: 28.5% gain
- 1-Year Performance: 33.2% gain
- 2-Year Performance: 109.8% gain
- 5-Year Performance: 721.6% gain
- 10-Year Performance: 2,807.3% gain
The stock has delivered exceptional returns over the long term, with a 10-year growth of 2,807.3%. Such performance is a testament to the company’s strategic growth initiatives and efficient management.
Financial Metrics
K.P.R. Mill’s financial indicators are as follows:
- Market Capitalization: ₹36,945 crore
- Enterprise Value (EV): ₹37,159 crore
- Book Value per Share: ₹136.95
- Price-to-Earnings Ratio (P/E): 45.67
- PEG Ratio: 2.38
- Dividend Yield: 0.46%
The Price-to-Earnings ratio indicates the stock is trading at a premium compared to peers, reflecting strong investor expectations. The dividend yield is moderate, aligning with the company’s reinvestment strategy for growth.
Shareholding Pattern (as of September 2024)
The company’s shareholding pattern underscores promoter confidence and institutional interest:
- Promoters: 70.68%
- Domestic Institutional Investors: 17.33%
- Foreign Institutional Investors: 5.60%
- Public Investors: 5.34%
- Others: 1.05%
- Government: 0.00%
The high promoter holding of 70.68% indicates strong confidence in the company’s future prospects. Institutional investors collectively own 22.93%, signaling substantial market trust in the company.
Technical Analysis of K.P.R. Mill Stock
Price Movement and Volume Analysis
The stock closed at ₹1,080.35 after reaching an intraday high of ₹1,099. This marks a 6.08% increase in price, accompanied by a volume surge of 2.67 million shares, which is 8.7 times higher than its 5-day average. The surge in delivery volumes, 3.7 times higher than the 5-day average, suggests strong accumulation.
Bollinger Bands
The stock has moved significantly above the median Bollinger Band of ₹974.10, indicating strong bullish momentum. The current price is approaching the upper Bollinger Band of ₹1,061.85, signaling overbought conditions.
Relative Strength Index (RSI)
The RSI stands at 75.04, indicating the stock has entered the overbought zone. Historically, RSI levels above 70 suggest the potential for a short-term correction or consolidation.
Moving Average Convergence Divergence (MACD)
The MACD line is at 29.99, significantly above the signal line at 21.51, with a histogram value of 8.48. This confirms the presence of a strong bullish trend.
Accumulation Swing Index (ASI)
The ASI stands at 3.34K, reflecting the consistent upward price movement and the strength of investor sentiment.
Peer Comparison
When compared to its peers, K.P.R. Mill demonstrates a balanced valuation and strong performance metrics.
| Stock Name | P/B Ratio | P/E Ratio | Dividend Yield | LTP (₹) | Market Capitalization (₹ Cr) |
|---|---|---|---|---|---|
| K.P.R. Mill Ltd. | 7.89 | 45.67 | 0.46 | 1,080.35 | 36,945 |
| Page Industries | 36.46 | 87.47 | 0.76 | 48,742.25 | 54,323 |
| Swan Energy | 5.40 | 0.00 | 0.01 | 787.15 | 24,669 |
| Vardhman Textiles | 1.67 | 19.79 | 0.73 | 546.60 | 15,754 |
| Jindal Worldwide | 10.32 | 91.55 | 0.05 | 386.65 | 7,745 |
- P/E Ratio: K.P.R. Mill’s P/E ratio of 45.67 places it between Page Industries and other competitors like Vardhman Textiles, reflecting moderate valuation.
- Market Capitalization: At ₹36,945 crore, K.P.R. Mill ranks second among its peers in the textile sector.
- Dividend Yield: While the dividend yield is relatively low at 0.46%, it aligns with the company’s focus on reinvestment for growth.
Growth Drivers and Future Prospects
Diversified Business Model
K.P.R. Mill’s operations across textiles, sugar, power, automobiles, education, and ethanol production provide a diversified revenue base, minimizing risks associated with sector-specific downturns.
Expansion in Retail
The company’s venture into retail under its proprietary brand marks a strategic move to enhance margins and capture consumer loyalty. This initiative is expected to contribute significantly to revenue growth in the coming years.
Ethanol Production
The entry into ethanol production aligns with India’s push for biofuels. With government incentives and increasing demand, this segment holds promising growth potential.
Strong Market Position
With a 10-year stock appreciation of over 2,800%, K.P.R. Mill has demonstrated its ability to outperform benchmarks and competitors. The company’s robust financials and operational efficiency further solidify its market position.
Technical and Institutional Support
The stock’s recent rally is backed by strong volume and delivery patterns, indicating institutional participation. The entry of the RSI into the overbought zone reflects heightened demand, although investors should watch for potential corrections.
Risks and Challenges
Overvaluation Concerns
With a P/E ratio of 45.67, the stock trades at a premium compared to sector averages. While this reflects strong growth expectations, it also increases vulnerability to market corrections.
Cyclical Nature of the Textile Sector
The textile industry is subject to demand fluctuations and raw material price volatility. This could impact K.P.R. Mill’s profitability in unfavorable market conditions.
Global Economic Uncertainty
Global economic challenges, including inflation and geopolitical tensions, may impact export-oriented businesses like K.P.R. Mill.
Conclusion
K.P.R. Mill Ltd. is a leading player in the Indian textile sector, with a diversified business model and a strong track record of performance. The company’s foray into retail and ethanol production positions it for sustained growth. While the stock shows bullish technical patterns, overvaluation concerns and sector-specific risks warrant cautious optimism.
Investors may consider K.P.R. Mill as a long-term investment, given its strong fundamentals and growth potential. Monitoring technical indicators like RSI and MACD will help in identifying ideal entry and exit points.
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