Kamarhatty Company | Upcoming IPO

Kamarhatty Company Ltd.

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Available in Depository:
NSDL
CDSL

Available for Investment:
Primary
Secondary

RATING

RECOMMENDATION

Sell

Business Type

Traditional Business

Investment Checklist

Management

Accounting Practice

Profitability

Solvency

Growth

Valuation

RATING

RECOMMENDATION

Sell

Business Type

Traditional Business

Kamarhatty Growth

Kamarhatty Revenue Growth

The company's total revenue has decreased from Rs. 210 Cr. in FY20 to Rs. 204 Cr. in FY21 registering a decline of 2.99%. Since the country has been facing the effects of the pandemic, which has created disruptions in business continuity and as a result, the company's facilities services revenue has decreased by approximately Rs. 699.29 Lakhs. Revenue from jute goods decreased by Rs.959 Lakhs, for kraft paper by Rs.345.26 Lakhs but increased by Rs.605.56 Lakhs for yarn and flax products.

Additionally, there was a natural disaster on 20th May 2020, wherein heavy rainfall with strong wind (named Amphan) took place in Kolkata. The disaster disrupted the operations of the mill very badly.

Kamarhatty Net Profit Growth(PAT)

In FY21, the company shows an increase in operating profit of 46.2% even when the company's revenue has shown a de-growth as the company saved the cost by cutting down on employee's salaries, wages, and bonuses, operational expenses such as packaging expenses, and transportation charges.

Kamarhatty EPS Growth

The company reported EPS growth from Rs.3.6 in FY20 to Rs.5.27 in FY21 which is 47.22% year-on-year (y-o-y) growth on account of increase in net profit after tax .

Kamarhatty Book Value Growth

In FY21, the company's book value grew by 7.09% because of an increase in retained earnings of the company.

Kamarhatty EBITDA Growth

In FY21, the company shows a increase in EBIDTA by 12.11% in FY21. The company was able to cut down cost by cutting down employee salaries, wages and bonus, operational expenses such as packaging expenses, transportation charges etc.

Kamarhatty Operating Profit Growth

In FY21, the company registered an increase in operating profit of 16.33%, as the employee's benefit expenses, operating expenses, and other expenses decreased in FY21 on account of the pandemic and cyclone in FY20.

Kamarhatty Asset Growth

In FY21, the company showed an increase in asset growth of 15.13%. The current assets of the company grew by Rs.12.65 Cr., whereas the non-current assets of the company increased by Rs.11.40 Cr. on account of capital work in progress, which increased by Rs.11.52 Cr.. The main reason for the growth in the company's assets is that the company proposed a new linen yarn manufacturing unit at Chandannagar.

Kamarhatty Cash Flow from Operations

In FY21, the company showed a decrease in cash flow from operations by Rs. 9.35 Cr. In FY21, the cash flow from operations decreased as the company spent Rs.7 Cr. in 2021 on the production of inventories.

Kamarhatty Solvency Ratios

Kamarhatty D/E Ratio

A marginal increase Debt to equity can be seen as the company's long term debt, short term borrowings, and other non-current liabilities increasing at a faster pace as compared to equity. The company has a high solvency risk. The company raised more funds in the form of debt in order to facilitate the setting up of its new linen yarn manufacturing unit.

Kamarhatty Current Ratio

The current ratio decreased from 1.07 to 1.06 in FY21. Current assets increased by 14.6% in FY21 over FY20, whereas current liabilities increased by 13.8% on account of an increase in other current liabilities and short-term borrowings. Overall, taking into consideration other current assets and other current liabilities, current assets increased more than current liabilities, leading to a decrease in the current ratio of the company.

Kamarhatty Quick Ratio

Inventory constitute 59% of the current assets. Company's quick ratio increased to .43 in FY21 . Company has very low quick ratio and has high solvency risk.

Kamarhatty Interest Coverage Ratio

There is a decrease in interest payments by 6.84%. The interest coverage ratio of the company increased to 2.07 because of increase in company's income in FY21.

Kamarhatty Operating Efficiency

Even though the company faced frequent lockdowns and heavy rainfall with strong wind (Amphan) which further led to a decrease in company revenue, the company was able to increase its operating efficiency as the company was able to control its expenses such as employee salaries, transport and packaging charges. The EBIT margin increased by 19.76%, the PBT margin increased by 55.63% and the PAT margin increased by 28.17%.

Kamarhatty Operating Profit EBIT Margin(OPM)

Kamarhatty Profit Before Tax Margin (PBT Margin)

Kamarhatty Profit After Tax Margin (PAT Margin)

Kamarhatty Profitablity Ratio

Kamarhatty Return on Equity(RoE)

The company's ROE increased by 36.06% y-o-y in FY21 compared to FY20. As per DuPont's analysis, the growth is driven by an increase in net income margin, which has increased by 50% as the company's net profit has increased. The asset turnover of the company decreased because the revenue of the company decreased in FY21 whereas the assets of the company increased.

Kamarhatty Return on Capital Employed(RoCE)

The company's ROCE decreased by 1.22% y-o-y in FY21 compared to FY20 as the company's equity increased by 8% and non-current liabilities increased by 22%, whereas EBIT increased only by 16%.

Kamarhatty Return to Assets (RoA)

In comparison to FY20, the company's ROA increased by 28.35% y-o-y in FY21. Total assets increased 15.12% y-o-y in FY21 over FY20, while net income surged 46% y-o-y in FY21 over FY20, more than offsetting the growth in assets. The net income has increased as a result of fewer expenses.