Kesar Petroproducts

Stock Opportunities Untested - but worth a good look
51

Even Meghmani Organics is into CPC Blue space, I saw their AR and noted 86% capacity utiisation and EBITDA margins for that division of 14%. Kesar’s capacity utilisation for FY18 is around 40% and EBITDA margins of 22%. Have to see how they plan to increase the capacity utilisation.

Disc: Invested small portion

Regards,
Bharath

52

The company’s ROCE has been increasing from -3 to 55 in 10 years
P/E of 5, ROE: 44, ROCE: 55, ROIC: 42
Promoter holding: 63%
Company has good consistent profit growth of 176.22% over 5 years
Stock is trading at 1.14 times its book value with no debt, is the management integrity in question, as they don’t pay any dividend?

any idea why it is trading so low?

source(ratestar and screener)

53

I think couple of negatives contributing to the downfall of the stock.

  1. Planned shutdown of their plant reported last month
  2. Crude oil price increase (main raw material)

Other than the above, there are some reg flags in the accounts as highlighted in this thread by other members in the group

Disc: Invested

54

Should the falling crude oil prices not help Kesar Petroproducts re-gain momentum?

55

[Latest Updates:

Kesar Petroproducts has signed an MoU with Govt. of Assam to invest Rs. 2,000 cr. for production of methanol from raw bamboo. Present M. Cap. is Rs. 272 cr.

Also, with recent preferential issue the promoter share holding will shoot by 3.68% (63.85% to 67.53%)](https://www.business-northeast.com/biofuel-industry-takes-center-stage-at-24th-safe-annual-convention-2023). Promoter might be increasing the stake at lower levels to dilute it at much higher level

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56

Q2 results:

  • 3% revenue growth YOY, 111% EBITDA growth, 71% PBT growth and 102% PAT growth.
  • PAT growth looks higher as company as company has not made any tax provision in this quarter.
  • If seen on QOQ, revenue is flat, EBITDA has fallen by 15% and PBT by 22.7%; underperformance is largely due to higher COGS compared to last quarter which resulted in gross margin compression of 240bp

Overall decent results

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