With a market capitalization of ₹ 769 crores, Kirloskar Electric Company is a micro-cap stock that is backed by LIC. The electrical engineering company manufactures transformers, alternating current (AC) motors, AC generators, direct current (DC) motors, diesel generator sets, electronics, and switchgear and offers solutions for customized applications related to industrial power.
India’s largest Domestic Institutional Investor, the Life Insurance Corporation of India (LIC) holds 8,34,457 shares or a 1.26% stake in the company, as of the March quarter of 2023.
In the past year, Kirloskar Electric Company’s share price increased from ₹ 23.70 apiece to the current level of ₹ 118.50, giving multibagger returns of 400%. Therefore, if an investor had invested ₹ 1 lakh in the company’s shares a year earlier, the value of their holdings would have been ₹ 5 lakhs today!
In the past month, its share price increased by 44.77% from ₹ 81.85 apiece to the current levels. When the Bombay Stock Exchange (BSE) sought clarification for the same, the company said that the price movement is market-driven and there is no material information or announcement having a bearing on the performance of the company.
Kirloskar Industries has a very high return on equity of 123.11%, but a slightly high debt-to-equity ratio of 1.42. Its shares were trading at a price-to-earnings ratio (P/E) of 6.10 which is lower than the industry P/E ratio of 28.05, indicating that the stock might be undervalued as compared to its peers.
The company’s promoters hold a 49.51% stake in it followed by retail investors with 47.46%, domestic institutions with 1.59% and foreign institutions with 1.44%.
Written by Simran Bafna
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