Auto ancillary stock jumps 8% after announcing ₹1,000 Cr revenue guidance by 2029
Auto ancillary stock: Shares of Indian automotive manufacturers surged by up to 8 percent following the company’s ambitious revenue target of Rs 1,000 crore by 2029. Kinetic Engineering Limited, with a market capitalization of Rs 421.07 crore, saw its shares trading at Rs 190.00 each, marking a 4.25 percent increase from the previous closing price of Rs 182.25.
The rise in shares can be attributed to Kinetic Engineering Ltd. (KEL) announcing plans to issue Rs 177 crore in convertible warrants over 18 months, with promoters committing Rs 55 crore by March 2025, including 25% for future investments pending SEBI and shareholder approvals. External investors, such as Transaction Square LLP and Sai Geeta Penumetsa, have subscribed Rs 17.10 crore.
The phased investment strategy includes Rs 60 crore by March 2025, Rs 44 crore by March 2026, and Rs 73 crore by March 2027, supporting KEL’s revenue target of Rs 1,000 crore by 2029 and increasing promoters’ stake from 59% to 70%. Since 2017, KEL’s promoters, led by founder Arun Firodia and family trusts, have increased their stake from 49% to 70%, investing via Rs 93.5 lakh shares to reach 2.26 crore shares by July 2027. The funds raised will be utilized to boost working capital, manufacturing, and EV component innovation.
In terms of financial performance, the company’s revenue decreased by 4 percent from Rs 37.00 crore in Q2FY24 to Rs 35.47 crore in Q2FY25, while net profit increased by 13 percent from Rs 1.92 crore to Rs 2.17 crore during the same period.
Kinetic Engineering Limited specializes in transmission components (gear shafts, gearboxes, and engines), small engines (up to
Ratio Analysis:
The company’s key ratios indicate a decline in performance, with the return on equity dropping from 34.12 percent in FY22-23 to 12.69 percent in FY23-24, and the return on capital employed decreasing from 14.48 percent to 10.37 percent. The net profit margin (NPM) for the fiscal year 23-24 stands at 3.47 percent.
Shareholding Pattern:
In the company’s latest shareholding pattern, the Promoters hold a majority stake of 59.35 percent, followed by Retail shareholders with a 33.52 percent stake, and Foreign Institutional Investors with a 7.12 percent stake.
Company Profile:
Kinetic Engineering Limited (Kinetic) specializes in manufacturing high-technology components and assemblies, focusing on Power Train Components. The company produces components for various vehicles, including passenger vehicles, commercial vehicles, tractors, two-three wheelers, and construction vehicles, as well as catering to non-auto segments.
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Disclaimer: This blog post is for informational purposes only and should not be considered financial advice. Investors should conduct thorough research and consult with a qualified financial advisor before making any investment decisions.