Shares of Prakash Industries rallied over 11 percent to a 52-week high of Rs 164.85 on October 10 as renowned investors Mukul Agrawal and Dolly Khanna picked up over 1 percent stake each in the company.
The Prakash Industries stock has surged over 15 percent in two sessions since the company filed the data late on October 6. The stock had traded last at Rs 156.70, up 7 percent, on NSE around 1:45pm.
Agrawal bought 1.4 percent stake in the company in the September 2023 quarter, taking his holding to 25 lakh equity shares. Khanna, on the other hand, picked up 1 percent stake or 17.98 lakh equity shares of the company.
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Prakash Industries is engaged in the business of steel and power generation. The company runs steel manufacturing units that produce a variety of steel products, including bars, rods, and wires. Additionally, they generate power through their captive power plants to support their manufacturing processes.
Q1 financial results
Prakash Industries’ fiscal first quarter net profit more than doubled on-year to Rs 89 crore. The company reported a 13.2 percent on-year rise in revenue from operations to Rs 1,013 crore in April-June 2023. The operating profit margins for the quarter also expanded 100 basis points on a yearly basis to 12 percent.
Stock performance, promoter stake
Prakash Industries stock has risen nearly 170 percent so far this year, outperforming the benchmark Nifty 50. The share price has tripled in the last one year, compared to 14 percent rise in Nifty during this period.
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The company has a low debt-to-equity ratio of 0.2 percent, implying that its assets are financed mainly through equities. Its price to earning (PE) ratio is 12.04, lower than its sector PE ratio of 32.54.
Promoters of the company have increased their stakes in Prakash Industries from to 44.24 percent in the September 2023 quarter from 44.11 percent earlier. The FII/FPI holding too has risen to 6.35 percent from 3.57 percent. The company's Return on Equity (ROE) for the last financial year was less than 10 percent at 6.44 percent, indicating an inefficient use of shareholder's capital to generate profit.
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