Up 1,174% in 4 Years! Pearl Global Industries Surges 7% – Is This Textile Multibagger Still a ‘Buy’?

Shares of Pearl Global Industries (PGIL) jumped 7.23% on Friday, reaching ₹939.80 after Avendus Spark Institutional Equities gave the stock a ‘buy’ rating. The brokerage set a target price of ₹1,350, predicting a 54% increase from its previous close of ₹875.40.

Global Reach Strengthens PGIL’s Position

Avendus highlighted that PGIL is the only publicly traded Indian Ready-Made Garment (RMG) manufacturer with factories in Bangladesh, India, Vietnam, Indonesia, and Guatemala. This international presence helps the company benefit from both India’s growth and the cost advantages of other RMG-producing countries.

Recent Organizational Changes

PGIL has undergone significant changes in the last five years, including the transition of its promoters to non-executive roles and the appointment of a professional management team. The company has also hired new auditors, bankers, and industry experts, which Avendus believes positions PGIL for long-term success, similar to other Indian garment companies that have thrived after such changes.

Aggressive Investment Strategy

Avendus pointed out that PGIL’s strong capital investment strategy is expected to help the company increase its share of India’s fragmented RMG export market. The brokerage forecasts the company’s production volume, earnings, and profit to grow at 15%, 25%, and 31% annually between FY24 and FY27. PGIL is also ramping up production capacity, aiming to grow from 85 million pieces annually to 115 million within the next three years, with a significant focus on India.

Focus on Value-Added Products

PGIL’s shift toward more value-added offerings and premium brands should boost its earnings per piece, thanks to a better product mix and economies of scale. Despite its strong performance, PGIL is trading at a relatively low P/E ratio of 10x FY27 compared to the industry average of 19x, which suggests room for future price increases.

Shares Up 1,174% Over the Past Four Years

PGIL shares have seen a remarkable rise, going from ₹73 to ₹930 over the last four years, marking an impressive 1,174% gain. The stock has delivered positive returns for five consecutive years, including a 217% rise in 2023. In August, the stock hit an all-time high of ₹1,095, and Avendus expects the rally to continue throughout the year.