Apparel maker Kitex Garments, panned for alleged corporate governance violations earlier this year after a stellar run on Dalal Street in the last three years, is back in the reckoning among investors.
The company shares soared almost eight per cent to Rs.484.55 after the Kerala-based company’s shareholding for the September quarter showed investor Sanjay Bakshi’s Value Quest India Moat Fund bought 1.65 per cent stake in the firm in the period. Bakshi, a finance professor, is known in the market as a value investor.
When asked about the reasons for buying the stock, Bakshi said in an e-mail response that he has no comment to offer. The stock was a top performer in the preceding three years. Investors lapped up the stock impressed by the company’s high return on capital and strong margins. But, after the issues surfaced, the stock’s returns have been ordinary so far.
“The stock is fairly valued. We prefer companies such as Arvind and Raymond over Kitex,“ AK Prabhakar, head of research at IDBI Capital said.
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