A low-priced stock trading under Rs.100 witnessed a 4 percent jump after the company announced the incorporation of two overseas subsidiaries aimed at expanding its presence in the automotive sector. The move signals the company’s strategic push toward global growth and development in the auto space.
Price Movement
During Thursday’s trading session, shares of Kanoria Chemicals & Industries Ltd jumped to an intraday peak of Rs.88.57 each, reflecting a 3.82 percent increase from the prior closing price of Rs.85.31 per share. However, the stock has retreated since then and is currently trading at Rs.87.92 apiece. Over the past five years, the stock has delivered over 180 percent returns.
What happened
CoSyst Control Systems GmbH, a step-down subsidiary of the company, has incorporated two wholly-owned subsidiaries, Adapt Control Systems GmbH in Germany and Adapt Control Systems Inc. in Canada, to strengthen its presence in the automotive sector.
Adapt Control Systems GmbH has an authorised and paid-up capital of 25,000 Euros. It currently has no turnover and is entirely owned by CoSyst. The entity will focus on the development and production of electronic devices for automotive applications. The incorporation does not involve any related party transactions, cash consideration, or regulatory approvals.
Adapt Control Systems Inc. has an authorised capital of 10,000 CAD and no paid-up capital as operations are yet to begin. It is also fully owned by CoSyst and shares the same business focus as its German counterpart.
Business Overview
Kanoria Chemicals & Industries Ltd. (KCI), established in 1960, is a well-established Indian company engaged in the manufacturing of chemical intermediates and specialty chemicals, primarily catering to the infrastructure and construction sectors. Over the years, the company has evolved into a diversified business group with interests spanning chemicals, automotive and industrial electronics, textiles, and renewable energy.
Product Offerings and Network
Kanoria Chemicals & Industries Ltd. (KCI) focuses its chemical manufacturing operations on key products such as Formaldehyde, Hexamine, Resins, and Penta products. The company runs three major manufacturing facilities located in Ankleshwar (Gujarat), Visakhapatnam, and Naidupeta (Andhra Pradesh).
Capacity Expansion
As part of its ongoing expansion, KCI recently doubled the production capacity of its Hexamine plant at Ankleshwar to 36 Metric Tons per Day (MTPD) and inaugurated a new Formaldehyde plant with a capacity of 345 MTPD, increasing its total Formaldehyde production to 763 MTPD.
Further, the company is undertaking another capacity expansion at Ankleshwar, adding 300 MTPD of Formaldehyde production using advanced Metal Oxide-based technology. This expansion, expected to be completed by FY 2025, will help serve various industries such as engineered wood, textiles, agrochemicals, and pharmaceuticals. Additionally, KCI is planning to set up a new Triacetin plant with a capacity of 6,000 Metric Tons Per Annum (MTPA) at the same location.
Financial Performance
According to its recent financial updates, Kanoria Chemicals & Industries Ltd reported consolidated revenue of Rs.348 crores in Q3 FY25, marking a 2 percent increase from Rs.342 crores in Q3 FY24. However, the company saw a surge in its net losses to Rs.29 crores, from Rs.15 crores in the same period last year.
Written by – Siddesh S Raskar
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