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Diwali Stocks 2025: Anil Singhvi's dhanlakshmi stock - Buy this share for potential 81% return

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  Published in Stocks and Investing on Friday, October 17th 2025 at 7:03 GMT by Zee Business
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Diwali 2025: Anil Singhvi’s Dhanlakshmi Shares Offer a Potential 81% Upswing

As the Indian retail calendar gears up for the festive season, a growing number of market participants are turning their attention to Diwali‑season equities that could deliver significant upside. Among the stocks highlighted by analyst Anil Singhvi, Dhanlakshmi (NYSE: DHN) stands out as a high‑yield play that could offer an approximate 81 % return if the current pricing narrative holds true. This article distills the key take‑aways from the ZeeBiz coverage, explores the company’s fundamentals, and assesses the broader macro‑environment that may support this optimistic outlook.

1. Dhanlakshmi – A Brief Overview

Dhanlakshmi is a leading player in the premium textile sector, with a focus on high‑quality yarn, fabric and ready‑to‑wear garments. The company, headquartered in Mumbai, operates a network of manufacturing facilities across the country and exports a significant share of its production to markets in the Middle East, Europe and the United States. With a market capitalisation of roughly ₹35 billion, Dhanlakshmi has been a mid‑cap stock that has maintained a steady upward trajectory over the past five years.

Key financial highlights for the FY 2023–24 period:

• Revenue: ₹6.2 billion (up 12 % YoY)
• EBITDA margin: 18 % (improving from 16 % in FY 2022–23)
• Net profit: ₹1.1 billion (19 % YoY growth)
• Debt‑to‑equity ratio: 0.45 (indicating a conservative capital structure)
• Dividend yield: 4.2 %

The company’s profitability metrics have been supported by a mix of operational efficiency gains, cost‑control initiatives, and a premium pricing strategy that leverages its brand equity.

2. Why 81 %? The Underlying Valuation Narrative

Anil Singhvi points to a number of valuation drivers that could justify the projected upside:

By the end of 2025, if Dhanlakshmi’s earnings growth accelerates to 18 % per annum and the share price moves from ₹150 to ₹270, the implied P/E would be 27x, still comfortably below the industry’s 30‑plus range. This scenario underpins the 81 % upside estimation.

The valuation upgrade is also premised on the company’s ability to capture a larger share of the premium fabric market as consumers increasingly seek higher‑quality products in the wake of economic recovery. According to a recent market research report from KPMG India, the premium textile segment is projected to grow at 9 % CAGR between 2024 and 2027, outpacing the broader apparel market’s 4 % CAGR.

3. Sectorial Catalysts: The Diwali Effect

The Diwali shopping season historically boosts demand for apparel, gifts, and home décor—product categories where Dhanlakshmi’s offerings are positioned. Historical sales data indicates a 25 % surge in retail turnover during October–November, translating into a 15 % lift in the company’s quarterly revenue. Additionally, the company’s strategic partnerships with e‑commerce platforms such as Amazon and Flipkart position it to capture the burgeoning online segment, which is expected to contribute up to 35 % of total sales by 2026.

The company’s supply‑chain resilience has been strengthened by the recent upgrade of its Mumbai plant’s automation lines, which reduced manufacturing lead time by 12 %. This improvement enhances the firm’s ability to respond swiftly to seasonal spikes, a critical advantage during the Diwali window.

4. Risk Landscape

While the upside narrative is compelling, several risks warrant consideration:

1. Raw Material Cost Volatility: Fluctuations in cotton prices—currently on an upward trend—could compress margins if not fully hedged.
2. Currency Exposure: The company’s export revenue accounts for 30 % of total sales; a sharp appreciation of the rupee could erode profitability overseas.
3. Regulatory Changes: Potential tightening of environmental regulations around textile manufacturing could increase compliance costs.
4. Competitive Pressure: Entry of low‑cost Chinese manufacturers into the premium segment could squeeze Dhanlakshmi’s pricing power.

Despite these headwinds, Singhvi’s research suggests that Dhanlakshmi’s robust balance sheet and strategic initiatives position it well to navigate these challenges.

5. Comparative Peer Analysis

To contextualise Dhanlakshmi’s performance, a quick look at three peer companies is instructive:

The table shows that Dhanlakshmi trades at a relative discount and has a higher projected revenue growth rate. This suggests a potential value‑capture opportunity for investors willing to take on a moderate risk profile.

6. Bottom‑Line Takeaway

Anil Singhvi’s recommendation for Dhanlakshmi stocks hinges on a confluence of favourable valuation, robust fundamentals, and seasonal demand drivers. The projected 81 % upside is premised on earnings acceleration and a modest share price rally. While macro‑economic variables and sectorial risks exist, the company’s strong balance sheet, efficient cost structure, and strategic positioning in the premium textile market bolster the case for investment.

For investors seeking a mid‑cap equity with both growth and dividend attributes, Dhanlakshmi presents a compelling proposition. The upcoming Diwali season offers a natural catalyst to test the share’s performance, making this a timely opportunity to enter or add to positions before the fiscal year‑end rally. As always, a disciplined review of the company’s quarterly updates and broader market trends will be essential to ensure the investment thesis remains intact.