As per the scrutinizer’s stock exchange report filed by JK Lakshmi Cement Ltd (“JKLC”),shareholders of JKLC have rejected a special resolution for increasing inter corporate transaction limit to Rs 10,000 crore. As per section 186 of Companies’ Act 2013, the mandate is to require a supermajority to pass the special resolution i.e, 75%. The resolution got 71% in favor of and 29% against it.
The proposal was to increase the limit from current Rs. 2,650 crore (of which 91.7% is already utilized) by 277% to Rs. 10,000 crore. The said proposal was opposed by proxy advisory firm IiAS who had recommended voting against the proposal.
IiAS further said:” We note that amidst the almost full utilization of current limits, there is a need for an increase in limit, however for an almost 3x increase, the company should have provided specific disclosures.” The proxy advisory firm had also advised the shareholders to vote against another special resolution for “approval for payment of Remuneration to B Bharat Hari Singhania, Chairman or FY 2022-23”.
JKLC is a part of JK Organisation group and its revenue was at Rs 6,071.05 crore in FY2023. JK group is over 135 years old and boasts operations in India and abroad with a leadership presence in the fields of tyre, cement, paper, power transmissions, sealing solutions, dairy products and textiles.In Q1 FY2024, the company reported 4.6% increase in revenue YoY from Rs. 1,654 crore to Rs. 1,730 crore. Bottom line de-growth was 29.4% YoY from Rs. 111 crore to Rs. 78 crore.
JKLC has fallen 2.4% today, trading close to its intraday low. The stock has been on a downtrend since December 2022 and has bearish signals one of which is a death cross that occurred in July 2022. The company however has received upside price targets from several brokers, including Motilal Oswal that has set Rs. 820 target, representing a 28% upside from current price.
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