KOCHI: The stock market has cheered Kitex Garments’ announcement to move out its expansion plan from Kerala to investor-friendly Telangana. As the stock price rose, Kitex chairman and managing director Sabu Jacob became richer by Rs 222 crore in the last seven days as he owns 55% in the BSE-listed company.
The stock price of the Kochi-based kids garment maker shot up by 44.26% since Friday when Sabu announced the decision to invest Rs 1,000 crore in Telangana, dumping its earlier investment plan for Kerala following the rift with the Left government.
After rising by nearly 20% on Friday, the stock price spiked another 20% on Monday when Sabu said his company would not make any more investments in Kerala, and that he was in discussions with Tamil Nadu, Andhra Pradesh and Karnataka for his future expansions.
Since the controversy broke out between the Kerala government and Kitex Group, the company’s stock price has increased from Rs 108.9 a piece to Rs 168.65 on Monday, an astounding rise of 55 per cent in a matter of just five trading sessions.
The total value of Kitex touched Rs 1,121.52 crore, an increase of Rs 408.32 crore from last Tuesday. The spike in stock price of Kitex, which is the world’s third-largest infant garment maker, is surprising given that the company’s net profit has been coming down. For the quarter ended March 2021, its profit after tax plunged by 53.06% to Rs 8.27 crore from Rs 17.62 crore during the same quarter the previous year. Total sales had also declined by 23.65% to Rs 111.70 crore in the quarter ended March 2021.