The shares of India’s leading organized retailers of home improvement and building products in India, including structural steel, pipes, plumbing, sanitaryware, roofing, paints, adhesives, and tiles for home and commercial projects, crashed by 76 percent. In this article, we will explain the reason behind the crash.
With a market capitalization of Rs. 571.31 Crores on Wednesday, the shares of Shankara Building Products Ltd declined upto 76 percent, making a low of Rs. 235.60 compared to its previous closing price of Rs. 989.50.
What Happened
Shankara Building Products Ltd, engaged in the retail and distribution of a wide range of building and home improvement products in India, has announced that it has demerged its trading business, which includes retail and trading of building materials, into a new company called Shankara Buildpro Limited (SBL), as approved by the court on August 21, 2025. Because of this, all shareholders of SBPL will get one share of SBL for every one share they held in SBPL as of the record date, which was September 24, 2025.
To calculate your investment cost after the split, you need to divide your original cost between the two companies: 34.19% for SBPL and 65.81% for SBL. For example, if you paid ₹50,000 for 50 SBPL shares, ₹17,097.30 will now be your cost for SBPL shares and ₹32,902.70 for SBL shares.
This share issue is not taxable, and for capital gains, the date you originally bought SBPL shares will also apply to your new SBL shares. Due to the demerger, the stock price has been adjusted and is trading up to 76 percent lower compared to yesterday’s closing price.
Financials & Others
The company’s revenue rose by 27.35 percent from Rs. 1,291 crore to Rs. 1,644 crore in Q1FY25-26. Meanwhile, Net profit rose from Rs. 16 crores to Rs. 32 crores during the same period.
The company has a strong Return on Capital Employed (ROCE) of 16.8% and a low debt-to-equity ratio of 0.12, indicating financial stability. Its stock is trading at a low P/E of 6.10 compared to the industry average of 44.2, making it look undervalued. Additionally, the PEG ratio is just 0.19, suggesting strong growth potential at a low price.
Shankara Building Products Limited is one of India’s leading building materials marketplaces, offering a one-stop solution for all building material needs. The company operates 126 locations, including 93 stores and 33 fulfillment centers, with over 5.2 lakh square feet of retail space.
It is focused on unlocking value by demerging its marketplaces business. It has achieved a strong 43% volume compound annual growth rate (CAGR) over the past three years in its core steel product segment, while also building a margin-accretive non-steel business that has seen a 42% revenue CAGR in the same period. This positions Shankara well for continued growth across both steel and non-steel product segments.
Shankara Building Products has strong supplier partnerships across various categories. In Steel, key partners include JSW, Jindal, and Apollo. For Plumbing & Sanitaryware, important brands are Kohler, Jaquar, and Duravit.
In the Tiles & Surfaces segment, Kajaria, Somany, and Everest are major partners. For Lighting & Electricals, notable brands include Havells, Philips, Havells, and Crompton. Lastly, in Paints, Chemicals, and Adhesives, Asian Paints and Nippon Paint are key collaborators.
Written by Sridhar J
Disclaimer
The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Trade Brains Technologies Private Limited or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
