Mangalore Chemicals and Fertilizers Limited, today, saw a jump of around 14 percent in its stock price, opening its trading session at Rs 76.65 and currently trading at around Rs 87. The core contributor to the same could be the recent acquisition by the company. The company, being the target company, will be acquired by Vistra ITCL (India) Limited wherein the mode of acquisition will be through a pledge of shares.
Mangalore Chemicals and Fertilizers Limited (MCF) is an Indian conglomerate and is the largest manufacturer of chemical fertilizers in the state of Karnataka. It has partnered with world leaders and has a significant amount of presence in fields such as agriculture, engineering & infrastructure, real estate, consumer durables, and services.
Some of the main products of the company include Ammonium Bi-Carbonate (ABC) – Food grade, Sulphuric Acid, Speciality fertilizers, and Nutrient products consisting of Water Soluble Fertilizers, etc.
Digging into the financials of the company, firstly the revenue and net profit figures have shown a drastic amount of movement. Revenues, during Q2, were standing at Rs 283 crores which increased to Rs 1,173 crores during Q3. Operating losses were reported during Q2 at Rs 19 crores which got a turnaround and converted to a profit of Rs 141 crores.
The net profit margins improved from a negative to a positive percent figure which is -11.36 percent in Q2 and 6.50 percent in Q3. Operating profit margins, showing the same kind of movement, went from -6.67 percent in Q2 to 12 percent in Q3.
Apart from the ratios discussed above, the Returns on Equity share capital and the capital employed have shown an improvement which showcases the increase of efficiency in the operations of the company. ROE was 11.64 percent in FY20-21 and 13.62 percent during the FY 21-22. ROCE, though increased marginally, proved to show confidence and reported 10.36 percent in FY20-21 and 10.54 percent in FY 21-22.
Ace investor Dolly Khanna holds a 1.24 percent stake in the company (1,465,990 shares) and has been actively holding a position in the same since March 2021. In addition to that, the promoter’s shareholdings have shown a slight increase from 60.54 percent in Q2 v/s 60.63 percent in Q3 upholding the faith in the company.
Meanwhile, the FIIs have taken their exit and are left with 0.13 percent holdings in the company in Q3 as compared to 2.25 percent in Q2. DIIs have reduced their holdings as well from 1.08 percent in Q2 to 1.07 percent in Q3.
Written by Amit Madnani
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