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Midcap stock falls 3% after company’s production stops due to labor strike

Published 20-06-2024, 02:27 pm
Midcap stock falls 3% after company’s production stops due to labor strike
KEIN
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The share price of this Cable company tumbled by 3 percent to an Intraday low of Rs 4,301.65 per share on Thursday after the firm’s productions were halted due to a labor strike.

With a market capitalization of Rs 39,074.54 crores, the shares of KEI Industries Limited went down by 3 percent, trading at Rs 4,328.00 a piece on Thursday’s afternoon session, comparing to its previous close of Rs 4,436.05 per share and to today’s low of Rs 4301.65 a piece.

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The fluctuations in the share prices were observed after the company announced that the operations of its plants situated at Rakholi and Chinchpada were partially affected due to the stoppage of production because of a labor strike. However, there is no strike at their other plants.

The company’s filings indicate a production loss of approximately Rs 8 crores per day due to the labor strike, driven by demands for higher wages. All of the company’s assets are covered by insurance. The company is engaged in discussions with labor contractors and workers to resolve this issue and will provide updates on further developments.

Taking a look into the financials of KEI Industries, On a year-on-year basis, the revenue from operations increased by 17.2 percent from Rs. 6,912 crores in FY22-23 to Rs 8,104 crores in FY23-24. Also, the net profits of the firm increased by 21.8 percent from Rs. 477 crores in FY22-23 to Rs 581 crores in FY23-24.

The EBITDA rose by 20.81 percent YoY From Rs 734 crores in FY23 to Rs 887 crores in FY24. The profit after tax ( PAT ) also increased by 21.72 percent YoY from Rs 477 crores to Rs 581 crores during the same time frame.

In FY24, the company’s revenue breakdown from various products was as follows: Rs 562 crores from EPC, Rs 218 crores from SS wire, Rs 3,043 crores from LT, Rs 1,335 crores from HT, Rs 659 crores from EHV cables, Rs 2,347 crores from HW/WW, and Rs 60 crores from other products. Additionally, the company has pending orders totaling approximately Rs 3,531 crores.

The shares of this company generated an overall return of 94.56 percent over the past one year and 45.90 percent over the past 6 months.

As of March 2024, the firm’s shareholding pattern stood at 37.08 percent for promoters, 15.61 percent for the public, 31.01 percent for foreign institutional investors, and 16.31 percent for domestic institutional investors.

Incorporated in 1968, KEI Industries Ltd (BO:KEIN) manufactures wires and cables (W&C) like EHV cables, HT cables, and LT cables, and sells them in India and overseas. The company is headquartered in New Delhi.

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Written by Zahal

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