Kamdhenu Venture

The steel business reported a 3% year-on-year revenue growth, reaching INR748 crores in FY25, despite a challenging year marked by a slowdown in construction activity. Profit Before Tax (PBT) for the steel segment grew 20% YoY to INR80 crores, and Profit After Tax (PAT) increased by 21% YoY to INR61 crores. Royalty income, a capital-efficient revenue stream, also saw an 8% growth to INR139 crores, reflecting the brand's strong recognition and market share of 20% in the organized retail branded TMT segment. The company remains debt-free with a healthy ROCE of 25.5% and ROE of 19.2%.

Kamdhenu Ventures Limited, primarily the paint business, experienced a difficult FY25 with revenue declining 8.9% YoY to INR266 crores and EBITDA falling 22.7% YoY to INR17 crores. PAT saw a substantial 50% reduction to INR7 crores, with the PAT margin compressing from 4.86% to 2.71%. This underperformance is largely attributed to intense competition from new market entrants, softer demand, and slower construction activity. Management acknowledged the competitive pressure but expects the market to stabilize within the next 6 months.

For the steel business, management is focusing on increasing the capacity of existing franchisee units by 20% in FY26, with 10-12% expected to be operational within the year, targeting a 14% volume growth. They are also exploring strategic stake acquisitions in select franchisee units, funded by INR45 crores from a preferential issue. In the paint business, the strategy involves climbing the value chain by increasing the share of high-value, premium finish products, expanding the dealer network, and strengthening the supply chain to drive revenue growth and improved EBITDA margins. Plans include increasing presence in South and West India to counter freight disadvantages.

The company plans a modest capital expenditure of INR10-15 crores for the paint business in FY26, primarily for tinting machines and balancing equipment, with potential for material outsourcing. For the steel business, INR45 crores from a preferential issue has been invested in franchisee units, office infrastructure, and brand strengthening, aligning with the objective of expanding in-house manufacturing capacity. The company maintained a debt-free status as of March 31, 2025, providing financial flexibility for these strategic investments.

Management directly addressed concerns from an individual investor regarding an 80% decline in KAMOPAINTS' share price. They acknowledged the grievance, attributing some of the price escalation to 'foul play' and social media misuse, for which actions including filing an FIR were taken. While acknowledging the impact of market competition on profitability (PAT margin reduced from 4.86% to 2.71%), management reassured that efforts are underway to restore market share, sales, and bottom line, expressing confidence in the company's future.