Shares of this smallcap company are expected to be in focus after signing the MoU to introduce new products for the defence and maritime industries. In one year, the stock has delivered a multi-bagger return of 304 percent to its shareholders.
Price Movement:
With a market capitalization of Rs. 1,096 crores, the shares of Krishna Defence & Allied Industries Ltd started on a higher note at Rs. 825 compared to its previous close of Rs. 800.70. During the trading session, the shares hit a low of Rs. 786.10, losing around 1 percent and closed the day at Rs. 800 apiece.
What Happened:
According to the exchange filing, Krishna Defence & Allied Industries signed a Memorandum of Understanding (MoU) with VABO Composites B.V, a company formed and registered under the provisions of Dutch Laws, a renowned manufacturer specializing in composite doors and hatches for ships.
Further, the company stated that the MoU with VABO Composite is strategically aligned with its vision to enrich its product portfolio and broaden its market presence in both India and the ASEAN region.
By leveraging VABO Composite’s advanced manufacturing capabilities, the company aims to develop and introduce cutting-edge composite solutions tailored for the defence and maritime industries.
As part of this strategic partnership, the company intends to establish a joint venture where Krishna Defence and Allied Industries Limited will own 51 percent, with VABO Composites holding 49 percent ownership. This joint venture will also establish a state-of-the-art manufacturing setup in India.
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.
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 FY22-23. 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.
Written By Vaibhav Pati
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