Trident Share Price rises more than 40% | Trident Stock Analysis

Introduction

Have you ever wondered what makes a stock shoot up like a rocket in the financial markets? Well, the story of Trident Ltd, a notable player in the stock market, is worth exploring. In this blog, we will take you through the exciting roller-coaster ride of Trident's stock, breaking down the factors that led to its spectacular rally and subsequent decline. Let's dive into the details and understand why Trident has been the talk of the town in recent times.

 

Rise in January

Picture this – a 45% rally in just 8 trading sessions! January witnessed Trident's stock soaring to new heights, leaving investors and analysts in awe. But here's the kicker – is this surge unique to Trident, or is the entire sector experiencing a similar phenomenon? We'll dissect the data and find out.

 

Comparing Peers

To gain a comprehensive perspective, we conducted a performance comparison of Trident with its counterparts. While companies such as Welspun Living and Raymond demonstrated modest gains, Alok Industries attracted attention by experiencing a remarkable surge of 73%. The pivotal question now arises: What distinguishes Trident from the rest? This blog aims at the mystery behind Trident's significant uprisings.

When examining the January returns of some peers:

• Welspun Living: 8%

• Raymond: 2%

• Siyaram Silks: -2%

• KPR Mills: -6%

• Alok Industries: 73%

• Arvind Ltd: 7.5%

 

Detailed Video

 

Recent Updates

Digging deeper, we discovered that Trident's surge was not just a stroke of luck. A significant announcement on December 29, 2023, revealed plans for a massive ₹830 crores investment to expand its yarn business in Madhya Pradesh. This move was expected to strengthen Trident's position in the textile industry, triggering a surge in stock prices.

 

Understanding Trident's Business

Before we get into the specifics, let's understand what Trident Ltd is all about. The company engages in yarn, home textiles, paper, and chemicals manufacturing, with a revenue breakdown of 86% from textiles and 14% from paper and chemicals. Incorporated in 1990, Trident Ltd manufactures, trades, and sells Yarn, Terry Towels & Bed sheets, and Paper & Chemicals.

 

1. Products:

• Yarn: Different types like cotton yarn, slub yarn, and more.

• Home Textiles: Stuff for your home, including towels, bed sheets, and decorative pillows.

• Paper: Different kinds like copiers, maplitho paper, and paper for printing Bibles.

• Chemicals: They're the biggest maker of sulphuric acid in North India.

 

2. Manufacturing:

• Trident has three places where they make things, called manufacturing facilities, in Punjab and Madhya Pradesh.

• In 2022, these places had a bunch of machines making yarn, towels, bed sheets, paper, and chemicals.

• They can make a lot of paper and sulphuric acid.

• They also have power plants making electricity, which helps run their operations.

 

 

 

The Historical Context

To truly comprehend Trident's roller-coaster ride, we need to rewind to a significant rally in 2021. Back then, factors like a ₹1100 crores fund raise, a substantial CAPEX plan, and an upgrade in credit ratings fueled the stock's surge. However, this glory was short-lived, and Trident faced a decline phase due to the aftermath of COVID-19.

 

The Decline and its Causes

 Post-COVID, Trident encountered challenges, witnessing a decline in profits and operational disruptions. Management issues, export market impacts, and facility shutdowns in 2022 contributed to a dip in stock prices.

 

Trident's Current Strategy

 Fast forward to the present - Trident is back in action with a 22% jump this week, touching its 52-week high. What's fueling this resurgence?

 1. Increased Capacity: Trident announced an Rs. 830 crores capacity expansion.

 2. Huge Volumes: Massive trading volumes on January 8 indicated heightened market interest.

 

3. Better Profit Growth: Profits are rebounding, with a reduction in cotton prices positively impacting the textile business.

 

4. Cash Management: Trident boasts good cash reserves and improved cash conversion cycles, outperforming the industry.

 

 

 

Conclusion

Trident's journey is a testament to the dynamic nature of the stock market. As investors, understanding the driving forces behind a stock's rise and fall is crucial. Trident's recent surge is a combination of strategic decisions, market dynamics, and global factors. Whether this momentum sustains in the long run remains to be seen, but for now, Trident has certainly left its mark on the financial landscape. Stay tuned for more updates on this exciting financial journey.

Disclaimer:

Please note that this blog is not any recommendation for buying or selling any stock. We always encourage the reader to do their research before investing in any stock.