New Delhi, July 04, 2020: Kamdhenu Limited, India’s largest manufacturer and seller of branded TMT Bars, in the retail segment, has declared its Audited Financial Results for the Quarter and Full Year ended 31st March 2020.
Particulars (Rs. Crores) | Q4 FY20 | Q4 FY19 | Y-o-Y | FY20 | FY19 | Y-o-Y |
Royalty Income | 22.2 | 23.8 | -6.8% | 94.2 | 84.0 | +12.0% |
Franchisee Volumes (in Lakh MT) | 5.8 | 6.4 | -8.7% | 24.0 | 22.8 | +5.4% |
Profit Before Tax (PBT) – Steel Business | 6.7 | 11.3 | -40.9% | 37.3* | 39.0 | -4.4% |
*Excluding Exceptional Items
Update on CoVID Situation
Update on Scheme of Arrangement
The Company has acquired 100% shareholding stake at face value in Kamdhenu Ventures Limited, whereby Kamdhenu Ventures Limited has become wholly owned subsidiary company of the Company. Further, Kamdhenu Colour and Coatings Limited being a wholly owned subsidiary company of Kamdhenu Ventures Limited, has become step down subsidiary of the Company.
It is hereby pertinent to mention that Kamdhenu Ventures Limited and Kamdhenu Colour and Coatings Limited was incorporated by the promoters of the Company to give effect to the proposed Scheme of arrangement of multiple entities*. The Board of Directors of the Company in its meeting held on 31st January 2020 has approved this proposed Scheme of arrangement, subject to the requisite regulatory approvals. The Company has already filed application with the Stock Exchanges for their approval and observation on the said scheme of arrangement.
Rationale of the Proposed Arrangement
Rationale for the proposed De-merger of Paint Business of Kamdhenu Limited into Kamdhenu Colour and Coatings Limited are, inter alia, as follows:
* Multiple Entities include Kamdhenu Concast Ltd, Kamdhenu Overseas Ltd, Kamdhenu Paint Industries Ltd, Kamdhenu Infradevelopers Ltd, Kamdhenu Nutrients Pvt Ltd, Kay2 Steel Ltd, Tiptop Promoters Pvt Ltd.
Commenting on the results and performance, Mr. Satish Kumar Agarwal, Chairman & Managing Director said:
“FY20 has been challenging year for the Indian Steel industry. The Industry faced challenges with slowdown in the economy, weak demand for steel, huge imports of steel and lastly the Covid-19 pandemic which led to shutdown of operations of all steel companies. Despite of these challenging business environment, we have increased our volumes by 6% to 24 lakh tonnes for FY20.
Our business has been impacted temporarily during nationwide lockdown in months of March, April and May and it will be reflected in the revenue and profitability of the Company to some extent. Our facilities have resumed operations and we are hopeful that the business environment improves in the 2nd quarter and we get back to normalcy in the second half of the year. We are currently working at 60% capacity and the ramp up is increasing on a daily basis.
Since this situation is exceptional and changing dynamically, the Company is not able to gauge with certainty, the future impact on its operations. However, the Company is confident about adapting to the changing business environment and respond suitably to fulfil the needs of its customers.
Our Company has managed to achieve Royalty income of Rs.94.2 crores during this Financial Year except the sales which did not happen in the last week of March 2020 due to nationwide lockdown. We have been able to leverage our Brand created through our large distribution and marketing strength.
Recently, the Government imposed anti-dumping duty on certain steel products imported from China, South Korea and Vietnam. This positive move shall boost the domestic steel manufacturers.
After a decline in FY2020, the demand for steel is likely to rebound with a double-digit growth in 2021. As stalled projects both in construction and infrastructure along with capital expenditure plans are coming back on track, demand for steel is likely to cover ground. Government spend in infrastructure and railways is a significant driver of demand. Affordable housing and rural development can improve construction activity further. Capex plans of manufacturers which are put on hold would come back on stream driving a robust demand of steel and its products.
Post the fire at the Paint Factory, we outsourced production from third party manufacturers and ensured the quality standards too. Currently, our paint plant is operational, and we expect normalcy to resume soon. For the year, the Company clocked revenues of Rs. 226 crores from the paint business.
We are constantly striving to improve our cost efficiencies and are conscious of product development and we are fully committed for the same. We believe in taking challenges heads on and prepared to adjust to these changing times as the business requires”
Corporate Comm India (CCI Newswire)
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