Research Report on K.P.R. Mill

• Market Cap: ₹ 32,647 Cr.
• Recommendation: Buy
• Current Market Price (CMP): ₹ 955
• Potential Upside: 1010
• Expected Holding Period:  Few Days

Key Catalysts

1. Strong Product Line: K.P.R. Mill makes a variety of products like yarn, fabric, garments, sugar, and ethanol. Their products are not only sold in India but also exported to more than 60 countries.
2. Retail Brand FASO: The company’s retail brand FASO is a key growth driver. With over 3000 retail stores selling innerwear and athleisure, the brand is gaining popularity. Adding Women’s wear in 2022 has increased its market reach.
3. Capacity Expansion: The company is increasing its processing capacity for fabric and garments. By FY26, it plans to add 30 million garment pieces per year, which is a big boost to its production ability.
4. Focus on Renewable Energy: K.P.R. Mill is investing Rs. 100 Cr in solar power, increasing its solar capacity to 37 MW. This will help them reduce energy costs and become more sustainable.

Overview of Industry Dynamics

The textile and apparel industry in India is one of the largest in the world, providing employment to millions of people. With increasing demand for garments, especially in export markets like Europe and the U.S., Indian companies like K.P.R. Mill have a strong growth potential.

The government has also launched schemes like PLI (Production Linked Incentive) for the textile industry, which benefits large integrated players like K.P.R. Mill. However, the industry faces challenges like raw material price fluctuations and competition from countries like Bangladesh and Vietnam.

Competitive Analysis

K.P.R. Mill has a competitive edge due to its vertically integrated operations, meaning it controls the entire process from yarn production to garment manufacturing. This reduces costs and improves efficiency.

• Domestic Advantage: With 1,300 domestic clients, the company has built a loyal customer base in India.
• Export Strength: By exporting to 60+ countries, it has diversified its revenue streams.
• Retail Growth: The retail brand FASO gives K.P.R. an edge over competitors who are more focused on B2B.

However, competitors like Vardhman Textiles and Arvind Ltd are also strong players in this segment, and the company will need to keep innovating to stay ahead.

Key Growth Areas

1. Garment Manufacturing: The expansion of garment production by 30 million pieces by FY26 will help meet rising demand.
2. Renewable Energy: Investing in solar and wind power is a smart move for cost savings and environmental sustainability.
3. Ethanol Production: The ethanol capacity expansion from 120 KLPD to 250 KLPD will increase revenue from the sugar and ethanol segment.
4. Retail Expansion: Growing the FASO brand, especially in women’s wear, can open new revenue streams.

Technical Analysis-

The chart of KPR Mill Ltd. shows that the stock is currently trading around ₹955, down by -0.89% for the day. The price appears to be bouncing off the blue trendline, which acts as a key support; however, there is no strong upward movement yet. The exponential moving averages (EMAs) indicate a mixed trend, with the stock trading below the 9, 26, and 50-day EMAs, reflecting short-term weakness. The 200 EMA, located near ₹957, is providing dynamic support and is a critical level to watch. Below this, the blue dotted line, likely the 200-SMA, at around ₹910, represents a significant long-term support zone. The recent peak near ₹1,200 serves as a major resistance, and the current correction suggests bearish momentum unless the price holds above support levels. Although volume is not visible on this chart, the rejection of prices above key EMAs hints that sellers are currently in control. Overall, the stock's trend is bearish in the short term, with limited upside potential unless it sustains above ₹988. If it fails to hold these levels, a further breakdown is likely.

Conclusion

K.P.R. Mill Ltd is well-positioned for future growth due to its diversified product portfolio, strong domestic and export presence, and focus on sustainable energy. While the textile industry has its challenges, the company’s investments in capacity expansion and retail growth make it a promising player.

The upcoming years look bright for K.P.R. Mill, as it continues to expand its footprint both in India and globally. With a solid order book of Rs. 1000 Cr for garments, the company seems ready to meet rising demand. However, it must carefully manage costs and competition to maintain its leadership in the industry.