Krishca Ltd : A SME offering steel strapping Solution

KRISHCA.pdf (3.1 MB)

Posted good set of results. Half yearly Revenue - approx 48.5 cr (Last year Revenue - 72 cr)
But, in their statement it appears they are comparing half yearly revenue (Sep 2023) to Full last year revenue (Apr 2022- March 2023).
This created a confusion among the investors. And hence,we can see selling in the stock.


Operating cashflows are negative; Receivables, Inventories and “Other current Assets” have shot up; Any idea why?

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I don’t think the result have anything to do with the correction. As stock corrected even before the result got published.

Krishca has reported good results with ~50cr revenues and 5.6cr PAT in H1. H2 will be significantly better than H1 because:

1/ New Capex coming in Dec’2023 for highly specialized strappings
2/ Packing Contracts Orders start executing

Margins also in H2 should be better vs H1 as value added products portion will increase going forward.

But the results formatting done by the company is not up to mark. They showed FY23 full numbers under half year. They also didn’t do H1FY24 vs H1FY23 yoy comparison which would have shown the correct picture.



Primarily due to the expenses related to setting up the 2nd plant. I might be wrong but thats what i understood from the cash flow statement.

Trade receivables growth more than sales growth, while the trade payables has reduced. Company seems to be having cash flow issues. Even the tax paid is 0.
Not happy with the accounting standards.
Disc - Exited for now and tracking

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Results were not reported for last year H1. Last year results are for the full year 2022-23, which was 72 crores of sales. Let’s assume that last year H1 sales were half of 72 crore which comes out to be 36 crores.

Now the situation looks like this:

Sales increased from 36 to 48 crores(33% growth)
In the cash flow statement inventory increased by 3 crores and trade receivables by 7 crores. The cash position in balance sheet is so thin that it appears that the business is facing cash flow problems.

However company is in high growth phase and also doin capex accordingly. They are guiding for 35-40% growth and the numbers are also supporting this guidance. In such cases it’s quite normal to face increase in inventories and receivables which is in line with the sales growth.

Company has raised fresh capital of 16 crores in IPO. The other current asset column in balance sheet shows an amount of 10 crores. There are no details available. It can be some cash equivalent or marketable security which will enhance their cash position. We need to find out.

In such a small company in early phases of growth the important factor is scalability, which the company appears to be on track. Rest of the numbers can improve going forward.

Disclosure: invested.


Got reply from management.

10 crores in current assets is advance given for new production line.
planning for concall soon ( not sure about that)


krishca.insights.pdf (1.1 MB)

Important Points to be noted-
1.Packing Contracts-
Successful Contract with Shyam Metallics Ltd
Securing a Pivotal Contract with PSU - Steel Authority of India (SAIL)
2. Overseas Subsidiary (2)
3. Doubling the capacity of steel strapping - Fully Operational by January 2024.
4. Dveloping a mobile application for our sales team, providing them with all the necessary data, documents, and resources to serve our customers better.
5. As per MD - “Our margins have experienced a slight 1% dip in comparison to the previous financial year. This decrease can be attributed to our current phase of aggressive growth and expansion, a strategic move we believe will yield significant long-term benefits. We anticipate that our growth will continue to thrive, with expectations of a substantial 35% - 40% growth rate.”


Krishca has released its latest analyst concall recording.


Currently steel prices are rising compared to Q1. Currently purchasing average at 70rs and selling at 92 - 95 Rs.

Company has several contractors for procuring raw material like 6 month and 3 months contracts. During Steel uptrend they try to use these 6 month contractors at fixed price. During Steel downtrend they purchase at spot price to manage the margins.

Current capacity utilisation is around 65%. Current line can make 140 Cr revenue at 100% utilisation. With the New capex line company can make 300 Cr at 80 to 90% utilisation.

Seals contributing 5% of revenue.

In December the company expects one more packaging contract to be confirmed. Currently participating in 6 to 7 big packaging contracts. Much bigger compared to contract packaging contract orders. In packing contracts 30 to 40% consist of steel straps and remaining 60% are manpower cost, packaging tools cost, etc…

The new capex line already has some customer commitments to sell 4Cr month on month.

Within 1 year the company can reach 40 to 50% utilisation in the new line.

In the first half of the year company achieved 4.5 Cr sales in Export. Already surpassed 4.5 Cr export sales in q3. So H2 will be better in terms of export order. Next financial year aims to reach 20% sales to export.

During September month 11cr sales happend & especially 4cr sales made in the last week of september. That’s why receivables numbers are high…

In the next financial year management expects some improvement in payable days.

Overall market size around 3000 crores including packaging contracts and steel strapping production.

In the long run management wants to have 50% of their overall revenue in the packaging segment alone.

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this is the biggest risk in my opinion, the margins may stay at 16-20% but absolute ebitda may crash as these steel prices move.
although the various suppliers give some sort of comfort.
packaging growth should also reduce this risk.


Some Additional points from concall

As per the management there are four types of steel strapping Regular, medium, high and ultra high tensile steel strapping.

The new production line that the company is making, is for all three types + ultra high tensile steel strapping. As old production line can only make regular, medium and high tensile steel strapping but not ultra high.

As per the management, industry is shifting toward ultra high tensile steel strap. As they are venturing into new product. The only question is, does this will improve their margins in the future?

They also mentioned, in steel strap they already have 10% market share according to their estimates. They are also guiding for 30% of market share in steel strap.

A minor correction on excellent analysis done by @hunter is that they are guiding for 50% above revenue coming from packaging not the market share.

Krishca does not have pricing power, so the entire growth will be lead by volume growth when it comes to steel strapping. But the packaging contracts has better and stable margin when compared to steel strapping. This can cushion some of the fluctuation in margin because of steel prices.

For the future I think three things needed to be tracked -

  1. Capturing more market share in steel strapping space.
  2. Focusing more on export for both steel strapping and packaging contracts.
  3. Packaging contracts contributing more than 50% in revenue.

If these three points can play out well. Krishca is looking like an excellent investment opportunity in my opinion.

*Disclaimer already invested


Q3 results
KSSLQ3RESULTS31012024_31012024150609.pdf (2.0 MB)

What they have done full year Last year, they are at par or better on 9M basis


Comparison is Quarter vs Half Year vs 9 Month vs FY 23 vs FY22.

You should compare it with making some common base.
Results are decent/good.


The results are not reported in standard column format ,please check the column heading .Result to me is actually good .

Discl: hold more than 1 %+ of the company ,hence views may be biased ,please do your own diligence

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can other investors drop mail to investors relations asking for concall ? I dropped from my end… waiting to hear back


Concall on February 07, 2024 at 12.15 P.M


Attended the Q3 FY24 concall yesterday.

  1. Commercial production from new plant will commence from the end of this month (FEB 2024).

  2. Revenue potential from both plants, combinedly, is Rs. 300 crs from strapping sales only apart from packaging contracts. Management is optimistic on achieving it by next three years.

  3. From packaging contracts, Rs. 100 crs revenue is possible within two years apart from strapping sales.

  4. For FY25 company has Rs. 10 crs of packaging contract in hand and company is participating in various tenders of packaging contract worth Rs. 300 odd crs.

  5. The company has generated 16% of sales from export up to 9M FY24.

  6. In middle east, the company is losing Rs. 35 odd crs of orders yearly from Chinese and Korean competitors because their products are cheaper there.

  7. So, Company is planning to set up new production line in middle east, to compete from Chinese and Korean companies there, through joint venture. This project will be financed through internal accruals and issue of preferential shares etc.

  8. The company is diversifying into other primary packaging solutions also apart from steel strapping solutions. That is the reason for appointing Mr. Jagajyoti Naskar as an additional director of the company, who has 24 plus years of experience in this field.

  9. The company will do concall after every quarterly result.

    Disclosure:- invested.