The shares of this microcap company jumped upto 2 percent in Friday’s trading session after announcing an increase in net profits by 1,037 percent.
Price Movement:
With a market capitalization of Rs. 299 crores, the shares of Uma Exports Ltd started Friday’s trading session on a flatter note at Rs. 87.50 compared to its previous close of Rs. 87.80. During the trading session, the shares hit a high of Rs. 88.74, gaining around 2 percent and are currently trading at Rs. 87.57 apiece.
What Happened:
Looking at the company’s recent financial performance, the revenue decreased by around 20 percent from Rs. 491.04 crores during the March quarter to Rs. 394.65 crores in the June quarter. On the other hand, the net profits declined by around 18 percent from Rs. 7.9 crores to Rs. 6.48 crores during the same period.
However, on a YoY basis, the revenue zoomed by 22 percent from Rs. 323.7 crores during Q1FY24 to Rs. 394.65 crores in Q1FY25. In addition, the net profits magnified by 1,037 percent from Rs. 57 lakhs to Rs. 6.48 crores during the same timeframe.
Moreover, Earnings before interest and tax rose 431 per cent to Rs 10.35 crore from Rs 1.95 crore, while the EBIT margins improved to 2.61 per cent during the quarter under review from 0.6 per cent in the year-ago period.
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Capex:
The company has also announced the establishment of a new Rs. 22-crore plant at Green Industries Park, Vada Gav (Village), Lajpur Choryasi District, Surat, Gujarat. This advanced facility will process 50,000 tonnes of pulses annually.
Once operational, the company will focus on international markets such as East Africa, Iran, Iraq, and Afghanistan. By utilizing established partnerships from its sugar and rice exports, the company anticipates a successful market entry, driven by the strong demand for pulses in these regions.
Furthermore, Uma Exports expects to achieve 15 to 20 percent average revenue growth in the coming years.
Additionally, the company is setting up a 55,000 TPA the company is establishing a 55,000 TPA pulse processing plant at the Jalan Industrial Complex in Howrah, West Bengal. It has also acquired the SWASTIK OIL REFINERY from NCLT and will operate both facilities together.
Located near Kolkata and the Land Custom Port for Bangladesh exports, the new plant will reduce logistics costs for both raw materials and finished products. The plant is anticipated to contribute to revenue and margin growth in the current financial year FY25.
Management Commentary:
At the end of FY23, the Indian government implemented a ban on the export of various grains and we went short on inventories as we entered Q1 FY24. This led to underperformance in the last fiscal year’s first quarter.
In response, we improvised our strategy to focus more on the domestic market, reducing our reliance on exports, which accounted for approximately 22% of our revenue in QI] FY24. By normalizing our inventories and conducting thorough market analysis, we were able to deliver a solid performance.
Looking ahead, we expect to see further improvements as we plan to commercialize our new plant in Kolkata, dedicated to pulses and grains, within the next six months.
Additionally, we will be launching another new plant in Surat in the next, financial year. Once these plants are operational, we will be well-positioned to capitalize on volume growth, particularly given the expected growth in the domestic market.
Important Financial Ratios:
In terms of key financial metrics, the company reported a Return on Equity (RoE) of 5.35 percent and a return on capital employed (RoCE) of 11.17 percent for the period spanning FY23-24. Additionally, during the same period, the net profit margin stood at 0.66 percent.
Company Profile:
UMA Exports Ltd is an Indian company that specializes in the wholesale and distribution of a wide range of agricultural products, including sugar, spices (such as dry red chillies, turmeric, and coriander), food grains, tea, pulses, and agro-fibre products.
Written By Vaibhav Patil
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