Best Textile Penny Stocks: Small textile companies are present in the early stage of the value chain producing yarns and fabrics, engaged in contract manufacturing or more. Their valuations lag behind larger companies due to business size and derived demand.
However, these textile penny stocks can be profitable investments for risk investors who think larger companies are overvalued. In this article, we present a list of best textile penny stocks for such risk-averse investors.
What is a Penny Stock?
Penny stocks are the stocks of small-cap companies, usually having a market capitalization of less than Rs. 500 crores. The companies have low share prices of less than Rs. 85 or so. The shares can trade for as rock bottom as Rs 1 or even 50 paise a piece.
A penny stock has relatively less liquidity. In addition to this, it may come with limitations of delivery only, no margin trading and more.
Risk-loving investors are always on the lookout for penny stocks with the hope of making multi-bag gains. However, penny stocks often implode as often as they rise. Retail investors should exercise extreme caution while putting their money into penny stocks.
Best Textile Penny Stocks in India
So without further ado, let’s quickly jump in to know about the best textile penny stocks in India on BSE and NSE.
Top Textile Penny Stocks #1 – Swasti Vinayaka Synthetics
![Top Textile Penny Stocks - Swasti Vinayaka Logo](https://tradebrains.in/wp-content/uploads/2023/11/Swasti-Vinayaka-Synthetics-logo.png)
Founded in 1981, Swasti Vinayaka Synthetics is engaged in the manufacturing of garments, shirts and other garments. It is a small cap textile penny stock with a market capitalization of Rs 60 crore.
The company has two factories at Palghar and Tarapur in Maharashtra. It has a well-established design studio with the latest CAD technology. Its key focus and expertise lies in producing high-quality cotton, cotton-blend and linen designer shirts.
Swasti Vinayaka Synthetics supplies its merchandise to large retail chains, the ready-made garment sector, garment exporters and large corporate houses.
Its client list includes some well-established names like Bombay Dyeing, Arvind Lifestyle Brands, Pantaloons, Trent, ITC, LIC of India, Coca-Cola and more.
Its net profit has remained consistent over the past three years despite recording a decline in revenue in FY21. For the financial year ending 2023, the textile maker posted a net profit of Rs 1.9 crore on revenues of Rs 26.82 crore. As a feather in its cap, it is a debt-free stock with an insignificant debt-to-equity ratio of only 0.05.
Top Textile Penny Stocks #2 – R&B Denims
![RB Denims logo](https://tradebrains.in/wp-content/uploads/2023/11/RB-Denims-logo.png)
R&B Denims was promoted by the RawatKhedia Group and the Borana Group in 2012. With a business history of over 30 years, both groups are well-known business families in Surat, Gujarat.
The company is one of the largest vertically integrated denim producers worldwide with an annual capacity of 30 million meters. Its state-of-the-art facilities can produce high-width jeans of up to 76 inches.
Additionally, its finishing facility is well equipped to produce a wide range of denim finishes: wet chemical application, foam application, over-dyeing, coating, resin application and more.
The incomes have grown over the years. For the financial year ending 2023, the denim maker recorded a net profit of Rs 14 crore on sales of Rs 276 crore.
It is a profitable business with high return ratios. RoCE and RoE stood at 18.89% and 21.56% respectively. As a vote of confidence, promoters have a high shareholding in the business at 73.7%.
Top Textile Penny Stocks #3 – Sarla Performance Fibers
![Top Textile Penny Stocks - Sarla Performance logo](https://tradebrains.in/wp-content/uploads/2023/11/Sarla-Performance-Fibers-logo.jpg)
Formerly known as Sarla Polyester Ltd., Sarla Performance Fibers is engaged in the production and export of polyester and nylon textured, twisted & dyed yarns, coated yarns, high tenacity yarns and sewing thread.
The company produces more than 250 varieties of value-added threads and yarns. In addition to its factories outside Mumbai in Silvassa, Dadra and Vapi, Sarla has a global presence with its operations in Portugal, and Europe. In FY2023, the company’s revenue stands at 387.4 Crore with total PAT 21.3 Crore.
The stock currently trades at an attractive P/E ratio of 24.31 and a price-to-book value ratio of 1.15. Additionally, it is a low-debt stock with a debt-to-equity ratio of 0.27.
Top Textile Penny Stocks #4 – APM Industries
APM Industries established its textile spinning facility in 1979-80 under the brand name of Orient Sintex. Fast forward to today, the company has a wide product line that is at par with international quality standards.
It is engaged in the manufacture of high quality blended spun yarn, Polyester yarn, Acrylic yarn, 100% fancy yarns and fiber dyed yarns. Its textile spinning unit has 55,584 spindles capacity to produce 18 million kg of yarn annually.
APM Industries is a turnaround textile penny stock that delivered stellar sales and profit figures in FY23. The company generated a net profit of Rs 21 crore on revenue of Rs 360 crore. This was accompanied by an expansion in operating profit margins.
In FY2023, The promoter holding in the textile penny stock stood at 64.1%. It currently trades at an attractive P/E ratio of 7.06 and price to book value of 0.68.
Top Textile Penny Stocks #5 – VTM
![VTM Limited Logo](https://tradebrains.in/wp-content/uploads/2022/12/VTM-Limited-Logo.png)
VTM Ltd. traces its origins back to 1946 when the Indian textile industry was in its nascent stage. Fast forward to today, it is a well-established player fulfilling requirements for both the domestic markets and exports.
It has a state-of-the-art production facility with 258 looms, 80 Sulzer machines, 163 air jets, 9 Jacquards and 6 Rapier Dobby looms. It produces different types of fabrics including square inch drills, twills, sateens, piques, jacquards, and a variety of complex dobbys. VTM earned a net profit of Rs 9 crore on sales of Rs 208 crore in FY23.
The textile penny stock has a high advertising ownership of 75%. It currently trades at a price-to-earnings ratio of 22.62 and an impressive price-to-book value ratio of 1.01.
The Madurai-based company is virtually debt-free with a zero debt-to-equity ratio of 0.02.
A brief section below highlights the research methodology used for this paper.