[radhutheoptimist]

Jagjit cotton textile limited, JCT…. Which has a history of more than 50 years, started by prestigious Karan Chand Thappar has turned into profits and currently available at 2.85. It has been hitting UC for sometimes. It is a well-known brand was struggling due to debts. However they could bring down their debt from 460 to 160 Cr and finally showing profits this year. They made good of ppe kit demand. My assumption is there will be kind of revenge purchase of garments once pandemic is subdued….it is available at less than 15PE and my target is 100% returns by the end of 2021. It may be available tomorrow as today’s turnover was huge…25 million shares… One can consider and I am happily holding 5 truck loads of this share😆

[radhutheoptimist]

After going through the numbers… I feel JCT will become debt free in 3 years time. As of now their Operating profit margin is around 10 percent with total sale around 650 Cr. They made a operating profit of 67cr but had to service the loan that gobbled up some 47 Cr as interest. They have around 160 cr debt and sitting on some 850 Cr asset. There are plans to sell some of the non-performing asset. Remember, JCT is more than 70 years old company. You can imagine the kind of land bank textile mills have. I am sure they will come out of the debt in 3 years time and EPS may be around 1 then. Bottomline is one can sure see 10x growth if one has the conviction to hold the shares for 3 years withering all operators game. With the expected growth in textile exports for the next few years JCT can give much higher returns. But let’s be conservative in our expectations. For all these to happen management needs lot of dedication into the business.

[radhutheoptimist]

JCT is now at 4.11 and has already given 40% return in two weeks time. Garments sales is expected to see a steep hike in coming quarters. With favourable government textile policy and ban on Chinese products JCT is expected to leap forward. One can consider for long term with little risk. Catching them young is the trick of the trade.

[Author]

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