Shares of this microcap company jumped 4 percent in Monday’s trading session after receiving an order from CNH Industrial (India) Pvt. Ltd. worth Rs. 70.76 lakhs.
With a market capitalization of Rs. 87.6 crores, the shares of Kranti Industries Ltd started Monday’s trading session on a higher note at Rs. 77.80, gaining around 4 percent compared to its previous close of Rs. 74.41 and are currently trading at Rs. 76 apiece.
Such a positive movement in the share price was observed after the company in an exchange filing announced that they had s received the business nomination letter along with a purchase order for the supply of machine parts of Baler from CNH Industrial (India) Private Limited sum of value of Approx. Rs. 70,76,561 lakhs.
This new order from CNH Industrial (India) Private Limited for product development, intended for use in combine harvesters, marks KIL’s entry into a fresh product line, indicating company growth and expansion.
To fulfil the order demands, KIL’s subsidiary, Preciso Metall Private Limited, situated in Kolhapur, Maharashtra, will manufacture the required raw materials (castings).
Looking at the company’s financial statements, the revenue decreased by 1.5 percent from Rs. 21.64 crores in the September quarter to Rs. 21.31 crores in the December quarter. On the other hand, there was a shift in net profits from a gain of Rs. 23 lakhs to a loss of Rs. 99 lakhs during the same timeframe.
The auto ancillary company enjoys long-term relationships with several major customers across domestic and global OEMs and tier-1 suppliers. Moreover, it has nurtured relations positively, which has allowed it to increase wallet share with key customers. As a result, its revenue from top-5 clients has increased over a period.
Furthermore, the company is also expanding its manufacturing capabilities with a new plant spanning 3,800 square meters. This new facility represents a significant investment in the future of the company.
Due to increasing expenditure, the profitability metrics of the company declined with the return on equity (RoE) decreasing from 10.36 percent during FY 21-22 to 8.31 percent in FY 22-23, and, the return on capital employed (RoCE) showed a downward movement from 10.59 percent to 9.70 percent during the same timeframe. Furthermore, the net profit margin decreased from 2.34 percent during FY 21-22 to 2.21 percent during FY 22-23.
According to the latest shareholding pattern, the majority stake of 69.03 percent in the company is held by the Promoters. The remaining 30.98 percent of shares are owned by Retail Investors.
Headquartered in Pune, Kranti Industries was incorporated in 1995. The company specializes in precision machining and manufacturing in the automotive industry. They are the manufacturer and supplier of automobile components, including differential housing, axle components, transmission parts, and other automotive products known for their accuracy and reliability.
Written By Vaibhav Patil
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