Stock Split For 1st Time: 1:10 Ratio, Record Date Will Be Intimated Soon; BUY/SELL Metal Stock?

Since 1995, Kamdhenu Limited has been a reputable flagship firm in the manufacturing steel industry. In 2008, Kamdhenu also ventured into the decorative paint industry. The largest producer and retailer of branded TMT bars in India is Kamdhenu Limited. In 1994, Kamdhenu Limited was established with the goal of offering the highest-quality TMT bars at the most competitive price. The firm is now the market leader in branded TMT bars under the leadership of Mr Satish Kumar Agarwal. In the retail segment, "Kamdhenu TMT Bar" is the best-selling TMT bar in India, with a brand sales turnover of almost Rs. 21,201 crores in FY24. In India, Kamdhenu has a network of more than 8,500 distributors and dealers.

Kamdhenu Stock Split

"Subject to the statutory approvals including approval of Shareholders of the Company, the Board of Directors have approved the sub-division/ split of equity shares of the Company, such that 1 (One) Equity Share of Rs. 10 (Rupees Ten Only) each fully paid up, be sub-divided/split into 10 (Ten) Equity Shares having face value of Re. 1 (Rupee One Only) each fully paid up. The Record Date for sub-division/split of existing Equity Shares shall be decided after obtaining requisite approval of the Shareholders of the Company and will be intimated in due course," said the company in a stock exchange filing.

"In order to accommodate the Sub-division/split of the Equity Shares as described above, the Board of Directors has approved that the Capital Clause i.e Clause V of the Memorandum of Association of the Company, be substituted in the following manner, subject to the approval of the shareholders: V. The Authorized Share Capital of the Company is Rs. 46,30,00,000/- (Rupees Forty Six Crore and Thirty Lakhs Only) which comprises of Rs. 34,80,00,000/- (Rupees Thirty Four Crore Eighty Lakhs Only) Equity Share Capital divided into 34,80,00,000 {Thirty Four Crore Eighty Lakhs) Equity Shares of Face Value of Re. 1/- (Rupee One Only) each and Rs. 11,50,00,000 (Rupees Eleven Crore and Fifty lakhs Only) Preference Share Capital divided into 1,15,00,000 (One Crore Fifteen lakhs) Preference Share of Face Value of Rs. 10/- (Rupees Ten Only) each," said Kamdhenu Ltd in a regulatory filing.

Kamdhenu informed stock exchanges that the reason behind the proposal of a 1:10 stock split is to enhance the liquidity of the company's equity shares and to encourage the participation of small investors by making equity shares of the company more affordable to invest.

Kamdhenu Financials

Kamdhenu's net profit improved 56.09% to Rs 15.89 crore in the September 2024 quarter from Rs 10.18 crore in the September 2023 quarter. Compared to the previous quarter, which ended in September 2023, when sales were Rs 185.04 crore, sales in the quarter ending in September 2024 increased by 2.78% to Rs 190.18 crore.

Commenting on the results, Mr. Satish Kumar Agarwal, Chairman & Managing Director said, "After a challenging Q1, we are pleased to report a strong recovery in revenue growth for Q2, primarily driven by increased construction activity. Despite some regional flooding challenges, Q2 FY25 revenue reached Rs. 190 crores, reflecting a 3% year-over-year growth with our volume sales through the franchisee route witnessing a growth of 11% Y-o-Y. Despite a decline in the average selling price of TMT bars we have witnessed a growth in revenue from own facility of 1% this growth was driven by an 8% uptick in our volume sales from our own facility."

"With the government's emphasis on capital expenditure and substantial investments in initiatives like 'Housing for All' and other infrastructure projects, we expect an upsurge in demand for TMT bars in the near future. We also achieved significant improvement in PBT margins, which rose to 11% from 7.3% last year. Our brand's reputation for quality and reliability continues to set us apart, attracting new franchisees and driving strong growth in royalty revenue, which increased by 11% to Rs. 33 crores. This royalty revenue remains highly capital-efficient, delivering substantial returns without major capital investment by leveraging our brand's strength. This performance underscores our ability to expand our franchise network while consistently meeting customer expectations for reliable products," he added.

"Indian consumers are increasingly favoring branded TMT bars over unbranded options, driven by a rising awareness of quality and safety in construction materials. With growth in infrastructure projects and supportive government regulations, quality and durability are top priorities for long-term value. Kamdhenu's branded TMT bars provide consistent quality, making them a preferred choice in this evolving construction landscape. Holding a 20% market share in the organized retail TMT bar segment, we're confident in our ability to grow our market presence in the years ahead. Our commitment to excellence and quality has been pivotal to our success, and we remain focused on advancing our products and strengthening our brand. Looking ahead, we aim to double our sales in the next 4-5 years through both our franchisees and in-house manufacturing," Satish Kumar Agarwal further commented.

Kamdhenu Share Price Target

"Kamdhenu stock price is bearish on the Daily charts with strong support at 524. A Daily close below support of 477 could lead to a target of 435 in the near term," commented A R Ramachandran, Independent Research Analyst.

Disclaimer

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