Kemrock Industries: Shares plummet on poor results and pledging of shares

Moneylife Digital Team 16 August 2012

Kemrock Industries & Exports tumbled to nearly half its price in 10 days. Poor results, increasing finance costs and additional pledging of shares has resulted in investors dumping the stock

Kemrock Industries & Exports, which was trading at around Rs500 per share sometime back, has fallen more than half to Rs205.15 on the BSE. The company which manufactures fibre reinforced composite materials has been on a decline in the last six days, hitting its lowest in the last three years. The promoters of the company have pledged nearly 70% of their stake and the recent quarter results have seen a huge drop in sales. The poor results which were declared a couple of days back resulted in the stock hitting its lower circuit of 10% today and closed at Rs 205.15 a piece.

The promoter of the company Kalpesh M Patel who holds 51.38 lakh shares (25% of total share capital), pledged an additional 6.97 lakh shares this month. This takes the total number of pledged shares to 36.87 to 36.22, which works out to 71% of his stake and 17.82% of the total share capital. The promoters hold a stake of 27.07% in the company as on 30 June 2012. Institutional investors hold a stake of 3.35% and retail investors hold a stake of 6.80%.

The decline in the stock price started after the recent round of pledging on 6 August 2012 where 6.97 lakh share were pledged to 12 institutions. Out of this two lakh shares were pledged to Karvy Financial Services, 1.2 lakh shares were pledged to Ess Dee Aluminium and 60,000 shares each to Bright Brothers and Sicom.

If this was not enough, the financial results for the quarter ended June 2012 sent investors over the edge. Sales declined by nearly 40% over the pervious quarter and by 45% year-on-year to Rs161.65 crore. Net profit came down by a whopping 93% y-o-y from Rs26.05 crore to Rs1.86 crore as finance costs also increased by 33% to Rs51.38 crore over the previous corresponding quarter. The operating profit margin for the earlier few quarters which was around 27%, which came down to 12%.

Established in 1981, the company manufactures and exports fibre reinforced composite products for major industrial sectors such as aerospace, defence, renewable energy, wind energy, railways, chemical processing, oil and gas, water and waste water management, infrastructure, construction, electrical and electronics, marine, telecommunications. The revenue from composite products came down by 40% over the previous quarter to Rs152.56 crore.

Venugopal K Shastri, who was a director of the company since November 2010, resigned earlier this month.

Comments

User

Bosco Menezes

1 decade ago

Incredible that FRP Holdings, which as per Kemrock's announcement today is going to invest 260 Million USD in the company to enable Kemrock to reach an OTS with banks, has practically NO web presence. So also it's president Mr. Earvin Richard who again has NO web presence. Surely a company that can invest 260 million USD in a single investment, should have a web presence ?
Wonder if Kemrock's bankers are so desperate to recover an NPA that they have not bothered to investigate the colour of the money they are getting ? Looking for answers if anyone has them .....

Arvind Mehta

1 decade ago

Company has no money for Salary of Employee.... PF... Income Tax pay and also for supplier...How can Company produce material and sale ???? Also no sales person.....Share price will be Rs. 10 in next month.......

Ramesh Poapt

1 decade ago

The new plant for aerospace rcp was first of its kind and was inaugurated by Dr Abdul Kalam, who praised this project-to the best of my knowledge.The Co's profit and share price zoomed during 2009-10-11.Co.will be in loss in the next quarter/s.But,perhaps that may not be the end of the Co.At some more decline,it could be interesting Co. risk/rewardwise for brave heart long term investors.

krishna

1 decade ago

fuck of for this company just in 3 days lost more than 100 rs/share, wt fuck are managment doing abouth share holders.