Business

Kamdhenu Ltd- Q1 FY22 : Overall Revenues stood at Rs. 145.9 cr , EBITDA stood at Rs.11.6 cr & PAT stood at Rs.5.6 cr

Kamdhenu Limited, India’s largest manufacturer and seller of branded TMT Bars, in the retail segment, has declared its Unaudited Financial Results for the Quarter ended 30th June 2021.

Paint Business – Key Highlights for Q1 FY22

Ø  Q1 FY22 was impacted by 2nd wave of Covid-19  which  led to localized and micro lockdowns. However, with unlocking of economy , we have started seeing some pick up in demand in June 2021

Ø  Paint Business contributed 23% of Revenues in Q1 FY22

Ø  Focus on increasing share of water based paint products and launching new variants in the market

Ø  Utmost importance to advertising and promotions and have  lately collaborated with Preity G Zinta  as  the Brand Ambassador  for decorative paints business under brand name Kamdhenu Paints

 

Update on Scheme of Arrangement

  • The draft scheme of arrangement including the demerger of paints business in a separate company had been filed with the Hon’ble National Company Law Tribunal, Chandigarh Bench, for its approval on 15th March, 2021 whereas NSE and BSE had already issued its observation letter on the scheme of arrangement on 28th September, 2020.
  • NCLT has approved the First Motion application of the Scheme of Arrangement including the demerger of Paint Business of the Company into a separate listed entity on 4th August, 2021
  • NCLT has also directed the Company for convening the meetings of equity shareholders, secured creditors and unsecured creditors on 25th September, 2021 of M/s Kamdhenu Limited through video conferencing, in accordance with applicable guidelines/ circulars of Ministry of Corporate Affairs

 

Steel Business – Key Highlights for Q1 FY22

Ø  Steel Business contributed 77% of Revenues in Q1 FY22

Ø  Franchise units and own manufacturing plant were impacted by restrictions imposed by the Government and localized lockdowns on back of second wave of Covid-19

Commenting­­­­­­­ on the results and performance, Mr. Satish Kumar Agarwal, Chairman & Managing Director said:“Q1 FY22 has been a challenging year with the second wave of Covid-19 impacting demand on account of localized and micro lockdowns rather than nation wide lockdown like last year. Production was impacted on account of partial operations, however with easing of restrictions, operations back to normal levels. With drop in Covid cases and a faster large scale rollout of vaccination drive across the country, we have witnessed a gradual pickup in demand from early June.Our capacity utilisation at both plants has been increasing gradually.  Despite of these external factors, we have reported revenues of Rs. 145.9 crores, EBITDA of Rs. 11.6 crores and PAT of Rs.5.6 crores for overall business for Q1 FY22.

 

For our paints segment, we have reported revenues of Rs.33.1 crores. for Q1 FY22. Post, the challenges in April and May 2021, we have started seeing normalcy from June 2021. We have witnessed certain delay in the restoration of the remaining building/ plant & machinery due to the second wave of Covid-19. It is almost nearing completion and expected to start soon. Our focus is on expanding our pan-India visibility through aggressive spends on advertising and promotions. Paint companies have witnessed pressure due to input cost inflation, however, raw material prices are expected to soften in the coming quarters. Though paint industry has faced challenges in short to medium term, however we believe factors like reducing repainting cycle and lower per capita consumption will drive growth for the decorative paints going ahead.

 

In our steel segment we have clocked revenues of Rs. 112.72 crs for Q1 FY22.YoY growth of 123% over a low base last year. Total brand sales turnover stood at Rs.3,485 crores for Q1 FY22.  Our Company has achieved royalty income of Rs. 21.5 crores in Q1 FY22. This is on the back of unique asset light model and our well-established brand in the market which is popular among the masses. Steel demand in India is expected to pick up in coming few months as consumption remains strong despite hit by the second wave of Covid-19. Starting June 2021, with unlocking of activities, we have started seeing economic activities back to normal levels. With affording housing projects, government push towards infrastructure spends and speeding up of real estate projects will drive the demand for steel products.

 

With huge availability of vaccines and strong improvement in the pace of vaccination, we are witnessing the growth momentum returning back to previous levels. Monsoon continues to remain favourable from agrarian economy perspective. Longer Diwali period should enable better sales for quarters ahead.

The business environment is still uncertain due to the predicted third wave of the pandemic, however we are well equipped to overcome the near term challenges. With our strong brand, marketing and distribution network and wide range of products in decorative paints, we are well placed to capture any opportunities in future. We are continuously looking to penetrate in markets where our presence is less and strengthen our footprints in existing geographies. Going ahead, we expect on expanding our business with more franchisee and dealers.”

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