Shares of this microcap company clocked 20 percent in Thursday’s trading session after receiving a certificate for the Pipes division. In one year, the shares have delivered more than 70 percent returns to its shareholders.
With a market capitalization of Rs. 705 crores, the shares of Chemfab Alkalis Ltd started Thursday’s trading session positively at Rs. 422.05 compared to its previous close of Rs. 421.65. During the trading session, the shares hit clocked 20 percent upper circuit at Rs. 505.95, also recorded as the company’s fresh 52-week high.
Such a bullish movement in the share price was observed after the company in an exchange filing announced that it had received Consent to Establish (CTE) for its OPVC Pipes division located at Sri City to enhance the production capacity from the existing 20 Tonnes Per Day (TPD) to 65 TPD.
With this, the company can enhance its operations from 2 production lines to 7 production lines. Furthermore, it mentioned that they will be commissioning their third production line by May 24 and the fourth production line by July 24.
Coming onto the company’s financial statements, the revenue increased by 8 percent from Rs. 79.58 crores during the September quarter to Rs. 86.33 crores in the December quarter. In addition, the net profits zoomed by 52 percent from Rs. 5.35 crores to Rs. 8.16 crores during the same period.
Chemfab Alkalis plans to set up a 250 TPD caustic soda capacity, desalination plant, and production of chlorine derivatives (such as aluminium chloride) under their wholly owned subsidiary, Chemfab Alkalis Karaikal Limited (CAKL).
Looking at the important financial ratios, the return on equity decreased from 12.32 percent during FY21-22 to 4.93 percent in FY22-23 and the return on capital employed declined from 5.69 percent to 2.81 percent during the same timeframe. Moreover, the net profit margin decreased from 6.45 percent in FY21-22 to 3.44 percent during FY22-23.
Headquartered in Chennai, Chemfab Alkalis was incorporated in 2009. It is in the business of manufacturing basic inorganic chemicals and PVCO pipes which are used in water supply and irrigation applications. The company serves both Indian and international markets.
Written By Vaibhav Patil
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