Earlier known as Hydro S&S Industries, Kingfa Science & Technology India (KSTI) manufactures modified plastics and engineering plastics. In May 2013, China’s plastic manufacturer Kingfa Sci & Tech Co picked up 66.5% stake in KSTI at 2.5 times the market price. The parent company currently holds 75% shares of KSTI. For the year ended March 2016, KSTI reported a revenue of Rs314 crore, up 43% from Rs219 crore reported for the same period a year ago. But KSTI has struggled to generate much profit. For FY15-16, its net profit amounted to a mere Rs10.80 crore. However, over the past three years, the stock moved up a humongous 7850% or nearly 79 times, from a low of Rs11.77 on 25 April 2013 to Rs935 on 15 July 2016. The current price is an extraordinary 88 times its earnings per share (trailing 12 months). With borrowings of Rs75 crore on 31 March 2015, the debt:equity ratio is as high as 9.23.
Will the Securities and Exchange Board of India (SEBI) investigate whether the upmove was due to the optimism of investors or is someone trying to rake up the price artificially?