Shares of Kennametal India Ltd (KIL) slumped to their 52-week low on the BSE on Thursday after the company informed the stock exchanges that its US-based parent-promoter plans to shed stake.
After touching day’s high of Rs 740, the stock fell to Rs 680 following the company’s announcement of promoter stake dilution.
The stock closed at Rs 690.45, a loss of Rs 45.95. At present, the promoter’s holding in the company is a little more than 88 per cent and according to SEBI guidelines, the public shareholding in a company should be a minimum of 25 per cent by June.
Erosion in performance
Currently, foreign institutional investors hold 0.61 per cent, domestic institutions 0.94 per cent and others hold 10.29 per cent. The equity capital of the company is Rs 21.98 crore.
Kennametal has witnessed steep erosion in its performance, particularly profitability in recent quarters.
On a turnover of Rs 139.40 crore in the three months ending September 30, 2011, its net profit was Rs 25.82 crore. Though in the June 30, 2012, quarter its sales income was up at Rs 143.44 crore, the net profit was down to Rs 15.09 crore.
But in the quarter ending September 30, 2012, (the latest quarter for which results are available), while the net income from operations was down to Rs 123.30 crore, the net profit slumped to Rs 6.12 crore from Rs 25.82 crore in the corresponding quarter in the previous year. The company's financial year ends on June 30 (July-June FY).
The extent of the value erosion the stock has suffered in the past one year could be judged from the fact that its 52-week high was Rs 1,247.
yegya.narayanan@thehindu.co.in