Kamdhenu's steel biz Q1 profit rises 44% to Rs 9.5 crore

Kolkata: Kamdhenu, a leading manufacturer and seller of branded TMT bars, posted a 44% growth in profit after tax (PAT) in its steel business at Rs 9.5 crore in Q1FY20 up from Rs 6.6 crore in Q1 FY19. The company’s profit before tax in steel went up 25.4% to Rs 12.8 crore in Q1FY20 against Rs 10.2 crore in Q1FY19. The steel business contributed 82% of the company’s revenues while paints accounted for the remaining 18%.

Sharing its unaudited results for Q1FY20, Kamdhenu said it has recouped its business strategy by reducing business to business trading sales and a focus on improving efficiencies in own manufacturing and on a franchisee-based business model which led to improved margins and better efficiencies. Kamdhenu’s royalty income grew 29% to Rs 24 crore in Q1FY20. The company said it is on course to beat its target of generating Rs 100 crore as royalty income during 2019-20.

Commenting on the quarterly results, Satish Kumar Agarwal, chairman, Kamdhenu Limited said: “We have been able to improve our overall sales volumes by nearly 20% despite the slowdown in steel industry, due to our business model,” adding the company will add more franchisee capacity going forward and reach five million tonne per annum mark by FY22.