Kitex’s shares are plunging! Know why

Shares of Kitex Garments, an exporter of childrens' clothwear, fell as much as 9 percent in early deals on Tuesday after the company reported a muted growth in its first quarter profit even as it signalled better growth ahead in the coming nine months.

Kitex's first quarter PAT rose to 15.9 crore rupees compared with 14.4 crore rupees in the same quarter a year ago. Sales during the April-June quarter were up a modest 6 percent to 109 crore rupees compared with 103 crore rupees a year ago. Both numbers fell below street's expectations.

As a consequence, Kitek plunged 7.7 percent, or 77 rupees, to 917 on the National Stock Exchange on a volume of 3 lakh shares in the first 1.15 hours of trade. This volume is 3 times more than the 5-day daily average of 1.1 lakh shares.

Kitex said its first quarter is normally slow compared with the quarters in the year ahead and that it maintained its guidance for FY16's revenue to hit 600-650 crore rupees as it planned to double capacity in 3 years time.

(Image credits: kitex)