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KMG Milk Foods (Rs40)
Earlier known as Rahul Dairy & Allied Products Ltd, the company changed its name to KMG Milk Foods Limited on 28 April 2012. In 2007, the company was suspended by the BSE for non-compliance with the listing agreement. The suspension got revoked on 28 September 2012. The company also did not comply with shareholding as well as corporate governance norms in June 2011. The company’s fundamentals are erratic. Strangely, it reported four consecutive quarters of net sales of Rs50 lakh, starting from the June 2012 quarter up to March 2013 quarter. Its net profits were erratic as well starting with a Rs14 lakh net loss in the March 2012 quarter, Rs5 lakh and Rs6 lakh in the next two quarters, a whopping Rs17 lakh net loss in the December 2012 quarter followed by a high net profit of Rs32 lakh in March 2013 quarter.
With such erratic fundamentals, the stock price rose a stupendous 133%, from Rs17.15 to Rs40, in just over seven months between 1 November 2012 and 3 June 2013. What is the BSE doing about this company that recently got its suspension revoked? Nothing.
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