A small-cap stock engaged in the business of manufacturing and sale of Steel Products and Power Generation is gaining investor attention after ace investor Dolly Khanna increased her stake for the second consecutive quarter, now holding 2.07 percent in the company. Notably, the stock is also part of Mukul Agrawal’s portfolio, highlighting growing interest from marquee investors in this emerging player.
Price Movement
During Friday’s trading session, shares of Prakash Industries Ltd jumped to an intraday peak of Rs.172.70 each, reflecting an 8 percent increase from the prior closing price of Rs.159.76 per share. However, the stock has retreated since then and closed at Rs.169.55 apiece. Over the past five years, the stock has delivered over 600 percent returns.
What Happened
Prakash Industries Ltd, a diversified company engaged in steel manufacturing, power generation, and PVC pipe production, has drawn renewed investor interest. The company operates an integrated steel plant and has a strong presence in the infrastructure and construction sectors.
Ace investor Dolly Khanna has steadily increased her stake in the company over the past two quarters. During the fourth quarter, she raised her holding by 0.8 percent, taking her total shareholding to 2.07 percent as of March 2025.
This follows her earlier increase in the third quarter, where she boosted her stake from 1.17 percent to 1.28 percent. Her consistent accumulation suggests a strong conviction in the company’s long-term growth prospects, further underlined by the presence of fellow investor Mukul Agrawal in the company’s shareholder list.
Recent Developments
An improvement in sales volumes consistently exceeding 12 lakh tonnes, along with a sustained rise in profit before interest, lease rentals, depreciation, and taxation (PBILDT) per tonne above Rs.8,000, would be seen as key positives for the company. Additionally, addressing concerns related to audit qualifications and resolving the pending FCCB payment issue would further enhance the overall quality of financial reporting and corporate governance.
Strategic Location Of Manufacturing Plants
Prakash Industries Ltd (PIL) benefits from a strategically located steel manufacturing unit in Champa, close to key raw material sources such as coal reserves, iron ore mines in Chhattisgarh, and the Bhaskarpara commercial coal mine. This proximity ensures cost-effective transportation of both raw materials and finished products, enhancing operational efficiency.
The commencement of coal supplies from the Bhaskarpara mine is expected to significantly reduce production costs. Additionally, the nearby Sikargutta iron ore mine further helps minimize freight expenses.
Financial Performance
Prakash Industries Ltd delivered a good financial performance in Q3 FY25, with revenue increasing by 5 percent year-on-year to Rs.926 crore, compared to Rs.885 crore in Q3 FY24. The company also witnessed a 4 percent surge in net profit, which climbed to Rs.84 crore from Rs.81 crore in the corresponding period last year.
Shareholding Pattern
As of the December 2024 shareholding pattern, promoters of Prakash Industries Ltd hold a 44.27 percent stake in the company. Foreign Institutional Investors (FIIs) own 3.69 percent, while Domestic Institutional Investors (DIIs) and retail investors hold 0.02 percent and 52.02 percent, respectively. Notably, ace inventors Dolly Khanna owns 2.08 percent and Mukul Aggarwal owns a 1.4 percent stake in Prakash Industries.
Accounting Ratios
The company has a Return on Capital Employed (ROCE) of 11.09 percent and a Return on Equity (ROE) of 11.05 percent. Its Price-to-Earnings (P/E) ratio stands at 8.24, lower than the industry average of 31.04. Furthermore, the company maintains a Current Ratio of 1.64, a debt-to-equity ratio of 0.12, and an Earnings Per Share (EPS) of Rs.19.73.
Written by – Siddesh S Raskar
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