Why the Feroz 1888 Mills Limited have Lower Stock Price With Their Competitor Towellers Limited

Feroz1888 Mills and Towellers Limited have both in same business model for making a high quality towels. Both companies have export oriented gain better market share globally as well as Pakistan. Towellers Limited setup the business in 1973 which is older from Feroz1888 mills limited. When its compare to deep down analysis on products Feroz1888 have high variations terry items also non terry items as compared to Towellers they manufacture apparel, baby products, bed products.

When get to my opinion there are three main reasons to get Towellers Limited company have strong hold in market. First on is that Feroz1888 mills limited have focus on specific niche on towels, it has a hugh amount of variation, categories and sizes in terry items where Towellers limited have very diversified products like in the same time manufacturing of towels, apparel, baby & bed products etc. Second is large amount of share dilute in the market, Towellers limited have 17 million in the market of 3.4 million shares in free float where Feroz1888 mills limited have 339.4 million share in market of 33.9 million share in free float. Mathematically dilution of high amount of shares effect the market cap of the share which will stock become more volatile.

Last reason which I find on that company is low net margin of Feroz1888 mills limited in FY2024 of 0.8% where Towellers Limited have 4% net margin. Which signals the strong financial position in FY2024. Most of the ratios which convert in high return because of net income. Both companies have strong cash generation from operations also they suffer a high energy cost which cuts down the net income that’s why companies have borrowed long and short term funds to run the business.

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