Edelweiss has increased target price on Welspun India to Rs 150 versus Rs 121 earlier.
Edelweiss expects a lot of buzz around textile sector today, because of the extension of the Rebate of State and Central Taxes and Levies (RoSCTL) by the government. Brokerages have been giving positive commentaries as a result of this announcement.
According to Equirus, the announcement of the extension of RoSCTL provides much-needed clarity for the sector because policy forms an important basis for quoting the prices of the export products.
Higher rates have come in as a relief to exporters right now. Welspun India, Himatsingka Seide had guided for lower margins for FY22 – because of lower export incentives and higher raw material prices. However, this will result in 300 basis points (bps) higher margins for both these companies.
Equirus believes, Arvind Ltd should see 200 bps higher operating margins at 12-13 percent.
Edelweiss echoes similar sentiments and expects EBITDA margins to improve for all these companies.Watch the accompanying video of CNBC-TV18’s Sonal Bhutra for more details.