Pokarna rallies over 9% as arm looks to expand capacity

NEW DELHI: Shares of Pokarna rallied over 9 per cent in Monday’s trade after the company informed exchanges that its subsidiary is planning to expand production capacity with investment of Rs 325 crore in a greenfield facility.

In a filing to BSE, the company said that its wholly-owned subsidiary Pokarna Engineered Stone (PESL) is looking to expand quartz surfaces production capacity by 130 per cent. "The investment is expected to be completed by June 2018," the company said.

The stock jumped 9.4 per cent to hit a high of Rs 1,125 on BSE. At the prevailing price, the stock is trading at 55.75 times its trailing 12-month earnings per share (EPS).

“PESL would finance this project through a combination of free cash flow/internal accruals Rs 75 crore and loan facilities Rs 250 crore. PESL is in receipt of financial sanction from its lead banker, for the term loan of Rs 250 crore, for funding the project,” the company said.

Further, Pokarna's board has approved extending corporate guarantee for the loan facilities to be extended to PESL, it added.