Share price of this small-cap metal stock and India’s largest TMT selling brand moved up by nearly 4 percent on BSE to hit an intraday high at Rs. 539.95 in the trading session of Tuesday, after reporting Q4 results with an increase in the net profit by 50.5 percent QoQ and 56 percent YoY.
With a market capitalisation of Rs. 1,401.2 crore, the stock has delivered positive returns of nearly 51.4 percent in the last one year and around 77.8 percent in the last six months. So far in 2024, the company has given about 41.6 percent positive returns.
The fluctuations in the share prices were observed after Kamdhenu Limited announced the financial results for Q4 FY23-24 and FY24, through the recent filings with the stock exchanges on Monday post-market hours.
The revenue from operations stood at Rs. 176.03 crore in Q4 FY23-24, increasing by 13.6 percent QoQ from Rs. 155.03 crore in Q3 FY23-24, and by 5.5 percent from Rs. 166.88 crore in Q4 FY22-23.
The company’s net profit increased to Rs. 16.75 crore in Q4 FY23-24, rising by 50.5 percent QoQ from Rs. 11.13 crore in Q3 FY23-24 and 56 percent YoY from Rs. 10.75 crore in Q4 FY22-23.
As of 31st March 2024, the Return on Equity (RoE) stood at 21.1 percent, while Return on Capital Employed (RoCE) stood at 28.5 percent.
Despite the challenges witnessed by the company including the volatility in the steel prices, it has maintained a strong volume growth, with volumes rising by 9 percent for the entire year and 11 percent YoY in the recent quarter.
The company has seen reduced realisations of TMT Bars, leading to lower revenues for the full year. The company has observed an improvement in pricing over the past few months and anticipates a rise in FY24–25.
A strong rise of 13 percent in the Royalty Income, which hit an all-time high of Rs. 129 crores, further solidifies Kamdhenu’s leading market dominance in the organised retail steel segment.
The brand’s sales turnover was unchanged on a year-on-year basis at Rs. 21,201 crores, mostly as a result of price reductions.
Due to several industry tailwinds, such as a robust government push for infrastructure, which includes schemes like housing for all initiatives, a Rs. 11 lakh crore Capex Outlay for FY24–25, and finally a shift in consumer preference towards branded construction materials, the company continues to see large growth opportunities.
Additionally, over the course of the next 18 months, the company plans to raise close to Rs. 100 crore through the issue of convertible warrants on a preferential basis, of which it has already received Rs. 24.27 crore.
Through the capital raise, the company look forward to re-model the franchisee business by acquiring stake in some of the franchisee units, investing in existing and new business ventures in India/overseas for diversification, incurring Capex in the current manufacturing unit and/or acquiring and setting up of new office premises.
Further, the Board of the company declared a dividend of Rs. 2 per equity share of face value of Rs. 10 each.
Incorporated in 1994, Kamdhenu Limited is engaged in manufacturing, marketing, branding and distribution of TMT Bars, structural steel, paints and allied products under the brand name KAMDHENU.
The company is the market leader in branded TMT Bars and ‘Kamdhenu TMT Bar’ is the largest-selling TMT Bar in India.
Written by Shivani Singh
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