Rupa jumps 20% after stellar Q4 show and funds picking stake

NEW DELHI: Shares of hosiery manufacturer Rupa & Company jumped 20 per cent, just shy of the circuit during the early trade on Tuesday as the company turned profitable and a couple of market veterans bought stake.

Renowned hedge fund manager Jeremy Grantham's GMO Emerging Market Fund and Abakkus Asset’s Sunil Singhania have purchased a small stake in the inner wear maker.

The apparel manufacturer returned to the black in the fourth quarter of FY21 as it posted a consolidated net profit of Rs 65.96 crore compared with a loss of Rs 4.28 crore in the corresponding quarter in the previous fiscal.

Shares of Rupa & Company rose 20 per cent to Rs 474.75 on Tuesday, only to trade at Rs 453.50 at 10.20 am. BSE Sensex was trading at 51,906.71, down by 30.73 points or 0.06 per cent, at the same time. The scrip was closed at Rs 396.50 on Monday.

A few days earliers, HV-EAM Smallcap Fund bought a substantial piece of Lux Industries, another innerwear company. Shares of Lux Industries have rallied over 75 per cent on the back fund buying and robust buying.

The rising interest of global equity funds in the sector is reflective of renewed interest in a space that had remained dormant over the past two years due to a crushing slowdown in domestic consumption.

The innerwear market in India was worth Rs 31,000 crore in 2018 and is expected to grow at an annual run rate of 11 per cent to Rs 89,700 crore by the end of 2028.

In the last one year, shares of Rupa & Company have gained 220 per cent to Rs 474.75 on Tuesday, from Rs 149 on June 02, 2020. In five previous sessions, the counter has rallied up to 45 per cent.

The Rupa & company's revenue from operations jumped 153 per cent to Rs 453.99 crore from Rs 179.30 crore posted in the same quarter year ago. For the full financial year 2021, the company logged its highest-ever revenues and profits at Rs 1,312.7 crore and Rs 175.3 crore, respectively.