This baking soda manufacturing firm saw its shares rise by 17 percent to an all-time 52-week high of Rs 662 apiece from its previous close after it was provided 6,449 hectares of land for lease alongside reporting a net profit of 21 percent in Q1FY25.
With a market capitalization of Rs 6,166.13 crores, the shares of GHCL (NS:GHCH) limited, surged around 17 percent trading at Rs 659 levels at 1:55 pm on Friday. The shares of this company generated an overall return of 21 percent over the past year and 14 percent over the past 6 months.
Is GHCL Ltd a buy or sell? What is its Fair Value? What are the company's health parameters? What are the positive and negative factors driving the company -- ProTips? Know all the answers on the company's overview page here.
What happened:
As per the stock exchange filings of GHCL limited, the firm has been provided 6,449 hectares of land for lease for a period of 30 years in Kutch for the production of salt.
Why it matters:
Once this development is complete, it will supply salt for the new soda ash Greenfield project in Kutch and Support the expansion of bromine production.
Additionally, along with this update, GHCL Limited has also released its latest financial results as of Q1FY25.
Results:
Comparing the numbers from the previous quarter to the current quarter, the net sales generated by GHCL Limited grew by 0.8 percent from Rs 823 crores in Q4FY24 to Rs 830 crores in Q1FY25. During the same period, the net profits grew from Rs 125 crores to Rs 151 crores demonstrating a 21 percent rise.
Comparing the numbers from the previous corresponding period to the current period, the net sales fell by 18.5 percent from Rs 1,019 crores in Q1FY24 to Rs 830 crores in Q1FY25. During the same period, the net profits fell by 64.5 percent from Rs 426 crores to Rs 151 crores.
Ratios:
As of Q1FY25 the ROE and ROCE of GHCL Limited stood at 17 percent and 20 percent respectively. Also for the same period, the net cash to equity and the net cash to EBITDA stood at 0.22 times and 0.82 times respectively.
Net cash and Gross debt:
The net cash surplus as of Q1FY25 stood at Rs 676 crores and the gross debt stood at Rs 177 crores, for the same period
Growth capex and Working capital:
The growth capex which is nothing but the investment used to fund projects or assets that are expected to contribute to the company’s expansion and long-term growth stood at Rs 141 crores as of Q1FY25. Also for the same period, the working capital and others stood at Rs 93 crores.
EBITDA:
The EBITDA of GHCL limited grew QoQ by 17 percent from Rs 201 crores in Q4FY24 to Rs 235 crores in Q1FY25. This growth was due to higher volume and reduced costs during the quarter.
Growth drivers:
The company’s future growth will be driven by several key initiatives, including the development of a new soda ash plant with an initial capacity of 500,000 metric tons, expanding sodium bicarbonate production, utilizing waste energy to produce salt, and increasing bromine production at its existing salt facility.
Budget benefits:
The Union Budget 2024 benefits the Soda Ash industry by supporting growth in several areas. A 10 percent import duty on solar glass may increase soda ash demand for solar panels. The PM Surya Ghar Muft Bijli Yojana will boost solar rooftop installations, and more funding for housing and infrastructure projects will raise the need for soda ash in construction and industry.
Shareholding Pattern:
As of June 2024, the promoters, the FIIs, The DIIs, and the public held 19.03 percent, 24.76 percent, 9.29 percent, and 46.91 percent of stakes in GHCL Limited respectively. Under the FII vanguard total emerging markets stock index fund held 1.04 percent of stakes in GHCL limited.
About the Company:
Incorporated in 1983, the company is in the business of chemicals, yarn, and commodity products. In addition, the Company also manufactures refined baking soda, which is a raw material for industries like bakery, pharma, fire extinguisher manufacturing, and cleaning agents.
Written By Zahal
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