Among individual stocks, Kitex Garments tanked 14 per cent to hit 52-week low of Rs 152.10 amid heavy volumes. The stock fell below its previous low of Rs 168.80, touched on December 23, 2022. For Q3FY23, Kitex Garments reported a consolidated net loss of Rs 4.22 crore due to sharp decline in sales. The company had posted net profit of Rs 34.69 crore in the year-ago quarter (Q3FY22). Revenue from operations during the quarter fell 66 per cent to Rs 68.21 crore from Rs 202.91 crore in Q3FY22.
"Globally, all business are facing recession and turnover has come down drastically across major business houses. All major retailers are doing distress sales in anticipation of further recession by giving discounts to the tune of 70-90 per cent," it said.
It may be noted that among leading global companies, in whole sale and retail segments, while some have shown slight increase in turnover, majority of them have seen drastic decline in profits. All retailers are selling under pressure offering phenomenal discounts. In turn, all business houses are reducing inventory and sourcing to manage the crisis. All Industries across the Globe including textiles are very badly affected.
However, Kitex Garments said the company expects this to be a temporary phenomena, only up to end of Q4FY23, and the company's order book in queue for 2023-24 indicates achieving a better performance in Q1 and normal performance by Q2.
Meanwhile, shares of TCNS Clothing Company dipped 7.5 per cent to Rs 431.60, after the company reported 98 per cent YoY decline in net profit at Rs 0.50 crore against Rs 25.10 crore in the year-ago quarter. Revenue was down 7 per cent YoY at Rs 306 crore.
The company said weak performance was due to muted festive and wedding season with delayed onset of winters. TCNS has widest womenswear reach with over 4,200 points of sales, with strong owned omnichannel network and deep partnerships across all key offline and online retailers.
Shares of Page Industries, too, were trading 1 per cent lower at Rs 37,967. The stock had hit a 52-week low of Rs 37,138.95 on February 10, 2023.
In Q3FY23, Page reported a subdued operational performance wherein revenues and profitability were below estimates. Gross margin declined 86 bps YoY to 52.4 per cent but Ebitda margin declined 532 bps YoY to 15.8 per cent (significantly lower than normally guided band of 19-21 per cent) owing to negative operating leverage.
The management indicated that the market was not as buoyant as expected, which negatively impacted the volume growth. Page is the exclusive licensee of Jockey international brand and is the market leader in the premium innerwear and leisurewear category.
Due to rich valuations (58x FY24E) and moderate growth outlook (owing to increased competitive intensity), analysts at ICICI Securities believe the stock price does not offer upside.
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