188% jump in FY24! Dolly Khanna, Mukul Agrawal just bought this small-cap stock

Seasoned equity investors Dolly Khanna and Mukul Mahavir Agrawal acquired over 1 per cent stake each in a small-cap firm that manufactures and sells steel products and is also involved in the generation of power. Shares of the company have already surged 188 per cent to Rs 146.22 apiece in the current financial year till October 9. The stock in question is Prakash Industries. 

The latest shareholding data showed that Chennai-based investor Khanna held 1 per cent, or 1.79 million shares of the company as of September 30. On the other hand, Agrawal had 1.40 per cent, or 2.5 million shares. They were not among the key shareholders of Prakash Industries in the previous quarter ended June 30. Foreign portfolio investors (FPIs) increased their stake in the company to 6.35 per cent in Q2FY24 against 3.57 per cent in Q1FY24. 

As far as financials are concerned, Prakash Industries’ net sales declined 12.34 per cent year-on-year to Rs 3,443.75 crore in FY23. On the other hand, net profit grew nearly 13 per cent YoY to Rs 190.48 crore during the same period. Operating profit of the company jumped 6.31 per cent YoY to Rs 424.57 crore in FY23. Meanwhile, the EBITDA margin increased to 12.33 per cent in FY23 from 10.16 per cent on a year-on-year basis largely owing to lower coal cost on account of higher supplies from long-term coal linkages. 

Net profit margin grew to 5.53 per cent from 4.29 per cent during the same period. The debt-to-equity ratio of the company stood at 0.08 times in FY23 against 0.10 times a year ago. 

Prakash Industries in its latest annual report said that the steel sector in India is one of the fastest growing, in-demand and robust sectors in the country and today it stands tall at the second largest global steel producer with a production of 120 million tonnes in FY2023. During the year the Indian steel industry witnessed robust growth of over 11 per cent in steel consumption over last year. The domestic steel consumption grew to 119 million tonnes in FY 2023 from 105 million tonnes in FY2022. 

The rising demand for affordable housing, infrastructure and construction projects has led to a strong demand for steel across the country. Moreover, the government’s thrust to make India self-sufficient has made room for sustainable urban development, construction of proposed logistics parks and industrial corridors, which is also complementing to meteoric rise in demand for steel in the country, according to Prakash Industries. 

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