Shares of Alok Industries witnessed a remarkable surge of 13%, reaching Rs 20.11 per share in Thursday's intraday trading. This surge brought the textile company very close to its 52-week high of Rs 21.7, and it happened amidst substantial trading activity.
As of 12:05 PM, the company's shares were quoting at Rs 19.83 each, marking an impressive 11% increase. This performance stood out, especially when compared to the marginal 0.11% dip in the benchmark S&P BSE Sensex. The trading frenzy resulted in a staggering 116.46 million shares changing hands across both the BSE and NSE in various block deals.
In the last month, Alok Industries' stock has shown incredible power, going up by 22%. In contrast, the regular stock market numbers, which most people use to measure it, actually went down by 2% during this time.
Alok Industries' share price shot up mainly because of some big news from Reliance Industries, which is owned by the super-rich Mukesh Ambani. This happened on August 14th, just before Alok's shares took off. Reliance Industries stated its intention to make substantial investments of approximately Rs 14,200 crore in its subsidiaries during the current financial year, with the largest portion, Rs 7,000 crore, allocated to Alok Industries.
Reliance Industries is ready to help Alok Industries with money and other types of support whenever they need it to cover their expenses. This strategic support is part of the resolution plan approved by the National Company Law Tribunal, Ahmedabad Bench. Reliance Industries holds a 40.01% stake in Alok Industries, while JM Financial Asset Reconstruction Company holds 34.99%.
Alok Industries stands as India's largest fully integrated textile company, boasting a strong presence in both the cotton and polyester segments. The company has established extensive production capacities and expanded its market reach across global territories. Alok Industries' core business activities encompass weaving, knitting, processing, home textiles, ready-made garments, and polyester yarns. Remarkably, the company exports 26% of its products to over 90 countries, including the US, Europe, South America, Asia, and Africa.
However, the company reported a 28.93% year-on-year decline in total income, amounting to Rs 1,415.66 crore, for the April-June quarter. This figure was notably lower than the Rs 1,992.02 crore recorded in the corresponding quarter of the previous year. Additionally, Alok Industries' net loss for Q1-FY24 expanded by 59.73% to Rs 226.14 crore, compared to Rs 141.58 crore in the same period last year.
Despite these challenges, Indian home textile players anticipate an improvement in demand starting from Q2-FY24, driven by the festive season. Furthermore, discussions on free trade agreements (FTA) are gaining momentum, with India planning FTA negotiations with the UK, Canada, and the EU during the G20 meeting.
Investors are closely monitoring Alok Industries' performance as the company navigates these dynamic market conditions.