Shares of this smallcap company jumped around 5 percent after receiving final approval for its coal mine from the Government of India. The shares have delivered a multi-bagger return of 149 percent to its shareholders in one year.
Price Movement:
With a market capitalization of Rs. 3,583 crores, the shares of Prakash Industries Ltd started Friday’s trading session on a higher note at Rs. 204.80 compared to its previous close of Rs. 193.28. During the trading session, the shares hit a high of Rs. 208.80, gaining around 5 percent and are currently trading at Rs. 200 apiece.
What Happened:
Such a positive movement in the share price was observed after the company in an exchange filing announced that the Ministry of Environment, Forest and Climate Change, Government of India had granted Final I Stage-II approval under the Van (Sanrakshan Evam Samvardhan) Adhiniyam, 1980 for Bhaskarpara Commercial Coal Mine in Chhattisgarh.
This approval comes after the company had previously received in-principle Stage-I approval for the mine on August 21, 2023. The company had also already obtained permission to establish the mine from the Chhattisgarh Environment Conservation Board.
Furthermore, the company expects to execute the mining lease for the Bhaskarpara Coal Mine by next month. The supplies of coal from this commercial mine will provide stability to Prakash Industries’ integrated steel operations and result in significant cost reductions.
Additionally, the company will be able to boost its revenue and profitability by selling coal from this mine in the open market.
Financials:
Looking at the company’s financial statements, the revenue increased marginally by 0.56 percent from Rs. 885 crores in the December quarter to Rs. 890 crores during the March quarter. In addition, the net profits jumped by around 10 percent from Rs. 81 crores to Rs. 89 crores during the same period.
Important Financial Ratios:
In terms of key financial metrics, the company reported a return on equity of 11.51 percent and a return on capital employed of 12.31 percent for the period spanning FY23-24. Additionally, the net profit margin stood at 9.46 percent during the same timeframe.
Shareholding Pattern:
According to the latest shareholding pattern, the Promoters possess a 44.24 percent stake in the company. Foreign Institutional Investors (FIIs) hold 4.95 percent of the shares, while Domestic Institutional Investors (DIIs) account for 0.11 percent. The remaining 50.70 percent of the shares are held by Retail investors.
Company Profile:
Headquartered in New Delhi, Prakash Industries Ltd is a diversified company in India that operates in core business areas like mining of coal, sponge iron, and iron ore and manufactures steel products including sponge iron, billets, wire rods, HB wires, and TMT bars at its integrated steel plant in Chhattisgarh.
Written By Vaibhav Patil
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