Mukesh Ambani’s Alok Industries Ltd Shares Surge by 5%, Expected to Reach Rs 48

Mukesh Ambani‘s backing has propelled textile company Alok Industries Ltd shares into focus with a consecutive 5% upper circuit in the past two trading days. The company’s shares closed at Rs 30.58, reaching an intraday high of Rs 30.58 on Thursday, marking another 5% upper circuit. This followed Wednesday’s close at Rs 29.13.

One of the significant reasons driving this surge is the recent capital infusion of Rs 7000 crore by the company. Alok Industries managed this fund from Indian State Bank and beyond its parent company. Banks provided Rs 3700 crore as term loans and working capital loans, while Reliance Industries invested Rs 3300 crore in non-convertible cumulative redeemable preference shares (NCCRPS). Reliance Industries holds a 40.01% stake in Alok Industries with 1,98,65,33,333 shares. On the other hand, JM Financial Asset Reconstruction Company maintains a 34.99% stake with 1,73,73,11,844 shares, leading to a total shareholding of 75%.

Experts in the stock market predict that Alok Industries shares could potentially reach the Rs 48 per share level in the short term. Sumit Bagadia, Executive Director at Choice Broking, suggests keeping this stock with a stop-loss at Rs 33 and a target price of Rs 44 in the portfolio. Once the stock surpasses the Rs 39 mark, it could swiftly move up to Rs 48 per share.

Alok Industries announced its Q3 FY24 results on January 17, 2024. The company experienced a 28.34% decline in topline and a 7.97% reduction in loss compared to the previous quarter. There was an 8.69% decrease in revenue from the corresponding period, and the loss surged by 31.51%. Sales, general, and administrative expenses decreased by 15.41% quarter-on-quarter and 20.19% year-on-year. Operating income reduced by 99.6% quarter-on-quarter but saw a 36.41% increase year-on-year. The Q3 FY24 earnings per share (EPS) stood at Rs -0.46, showing a 7.87% increase year-on-year.