Kaushalya up 20% for second day despite 30% drop in sales

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Kaushalya Infrastructure Development Corp Ltd has seen its stock hitting the 20 percent upper circuit for two consecutive sessions following its March quarter earnings. Remarkably, this surge occurred despite significant trading volumes. By 1.47 pm, the stock had reached a high of Rs 5.76 per share, a level last observed on December 7, 2022. In just two sessions, the stock gained an impressive 44 percent.

The upward movement in the stock commenced after the company reported a substantial increase in net profit for the March quarter. Compared to Rs 1.91 crore in the previous year, the firm achieved a consolidated net profit of Rs 15.17 crore. The surge in net profit is attributed to the "recognition of profit on sale of investment of associates as part of revenue share received by them and it also resulted in an increase in the value of investment in associates by Rs 16.99 crore," as stated by the company.

However, specific details regarding the individual share received from its subsidiaries and joint ventures in regard to earnings have not been disclosed by the company.

Kaushalya Infrastructure Development Corp Ltd has three subsidiaries —Bengal KDC Housing Development, KDC Nirman Ltd, and Kaushalya Energy Pvt Ltd — and one step subsidiary, Azur Solar KDC Pvt Ltd. Additionally, the company has four joint ventures and associates, namely Orion Abasaan Pvt Ltd, Kaushalya Nirman Pvt Ltd, Kaushalya Township Pvt Ltd, and Kidco NACC.

In Orion Abasaan, the company holds over 48 percent stake while in Kaushalya Nirma it holds 46 percent stake. In Kaushalya Township it has 48.7 percent holdings while Kidco NACC has 90 percent stake.

The financials

Meanwhile, the firm reported a revenue for the March quarter, with a decrease of 32.78% to Rs 3.22 lakh compared to Rs 4.79 lakh in the previous year. The consolidated profit for FY23 stood at Rs 15.46 crore, up from Rs 42.77 lakh in the previous year. Additionally, the revenue for FY23 fell by 9.52% to Rs 12.44 crore compared to Rs 13.75 crore.

On a standalone basis, the company reported a loss of Rs 1.43 crore for the quarter, contrasting with a profit of Rs 1.75 crore in the previous year. For FY23, there was a loss of Rs 1.77 crore compared to a profit of Rs 6.33 lakh in the previous year.

Kaushalya Infra specialises in providing infrastructure construction services, including residential, agriculture, commercial, industrial, healthcare, and educational construction. The company primarily serves clients in India.

While the stock has shown significant returns as a multibagger since 2020, its earnings performance has not been as impressive. In terms of financials, the firm reported a loss of Rs 5.58 crore for FY20, while net profit for FY21 stood at Rs 6.44 crore. The revenue figures for FY20 and FY21 were Rs 18 lakh and Rs 2.27 crore, respectively. Notably, the company has been reducing its debt, which decreased from Rs 63.5 crore in FY18 to Rs 23.60 crore as of December 2022.