Shares of this small-cap stock associated with household appliances dipped around 7 percent on Tuesday after the company’s shareholders voted against the merger with its Parent company.
With a market capitalization of Rs 1,954.32 crores, the stocks of Butterfly Gandhimathi Appliances Limited opened their trading session on Tuesday at Rs 1,187.75 and currently trades at Rs 1,093, dipping nearly 7 percent as compared to the previous closing levels of Rs 1,169.20 apiece.
Such bearish sentiments around the company’s stock prices were observed after a BSE filing, on 30th October 2023, intimated that the majority of shareholders of Butterfly Gandhimathi did not approve the scheme of merger with Crompton Greaves, its Parent entity.
The public shareholders of Butterfly were set to receive 22 equity shares of Crompton for every five shares held by them in Butterfly, but, despite the same, the target’s shareholders voted against the merger.
In March 2023, Crompton Greaves announced the merger with Butterfly Gandhimathi after buying a majority stake in the Chennai-headquartered company in February 2022.
Coming onto the recent financial performance, the company, in the recent financial results for Q2FY24, reported an increase in operating revenues from Rs 218.98 crores during Q1FY23-24 to Rs 307.97 crores during Q2FY23-24. Moreover, the company’s net profit figures, during the same time horizon, have stayed uniform at levels of Rs 15 crores.
In addition, the company’s profitability metrics have seen decent growth with the return on equity (RoE) moving up from 7.05 percent during FY21-22 to 19.91 percent during FY22-23, and, the return on capital employed (RoCE), during the same period, increasing from 14.30 percent to 30.61 percent.
As per the shareholding pattern data for the quarter ended September 2023, the company’s Promoters hold a 75 percent stake followed by the Public (retail) investors holding a 18.48 percent stake in the company.
Butterfly Gandhimathi Appliances Limited, a subsidiary company of Crompton Greaves Consumer Electricals Limited, is engaged in the business of manufacturing and selling domestic electric & kitchen appliances under the ‘Butterfly’ brand name within as well as outside India.
Written by Amit Madnani
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