The shares of this microcap company locked a 5 percent upper circuit after receiving an order worth Rs. 88.41 crores from the Ministry of Defence. The shares have delivered more than a 130 percent return to its shareholders in one year.
Price Movement:
With a market capitalization of Rs. 951 crores, the shares of Krishna Defence & Allied Industries Ltd started Tuesday’s trading session on a lower note at Rs. 628.55 compared to its previous close of Rs. 661.50. During the trading session, the shares clocked a 5 percent upper circuit at Rs. 694.55 apiece.
What Happened:
Such a bullish movement in the share price was observed after the company in an exchange filing announced that it had bagged an order from the Ministry of Defence for the Supply of special Weld consumables to be used for the critical platform, worth Rs. 88.41 crores.
With the above order, Krishna Defence cumulative order wins for FY 2024-25 stands at a Rs. 288 crores, equating to 2.72x of our last year’s total revenue
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Financials:
Looking at the company’s financial statements, the revenue magnified by 103 percent from Rs. 35 crores during H1FY24 to Rs. 71 crores in H2FY24. In addition, the net profits zoomed by 133 percent from Rs. 3 crores to Rs. 7 crores during the same timeframe.
Order Book:
As of March 2024, the company had a total order book of Rs. 186.62 crores, out of which 99.05 percent of orders were received from the Defence segment and the remaining 0.5 percent of orders were received from the dairy segment.
Future Plans:
The defence company is planning a CapEx of Rs. 15 to 20 crores for a new facility to manufacture weld consumables and bulb bars. And they have set an ambitious target to achieve revenue growth of Rs. 500 crores by FY 28.
The company is working towards new product development for the defence to indigenise the products that are currently being imported, Offset contract obligations and collaborate with Defence Research Agencies / Foreign agencies to develop and manufacture the products.
Additionally, the company is aiming to increase capacity for key products by 50 percent at Halol, Gujarat, to cater to the growing order book and demand from the defence sector.
Recent Development:
Earlier, the company secured a significant order for the supply of Special Steel Products for a critical platform from Larsen & Toubro Limited valued at approx. Rs. 104 crores.
Prominent Investors:
According to the NSE data, Ace Investor Mr Ashish Kacholia, entering the stock in September 2023, currently holds over 4.20 lakh equity shares equivalent to a 2.99 percent stake in this company. The current holding value of his investment amounts to over Rs. 29.14 crores.
Important Financial Ratios:
In terms of key financial metrics, the company reported a return on equity of 9.21 percent and a return on capital employed of 13.43 percent for the period spanning FY23-24. Additionally, the net profit margin stood at 9.19 percent during the same timeframe.
Company Profile:
Headquartered in Mumbai, Krishna Defence and Allied Industries was incorporated in 2013. The company develops, manufactures, and designs Defence Application Products, Kitchen, and Dairy Equipment Products.
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Written By Vaibhav Patil
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