Kothari Petrochemicals Limited (KPL) is a leading manufacturer of polyisobutylene (PIB), a high-performance synthetic rubber used in a wide range of applications, including adhesives, sealants, and lubricants. The company has witnessed remarkable growth in recent years in the stock market. With sound financial parameters, should you consider investing in this stock or not? Find out in this article.
Weekly Chart of Kothari Petrochemicals stock
KPL’s stock price has exhibited an impressive upward trend since 2020, with a few corrections along the way.
From a modest ₹16 per share in 2020, the company’s stock price has soared, crossing the ₹120 mark in 2023, a remarkable growth of over 600%. KPL has been continuously investing in research and development, leading to the launch of innovative products that cater to evolving customer needs. This commitment to innovation has strengthened the company’s competitive edge and contributed to its growth trajectory.
Market Presence and Ambitious Expansion Plans
KPL is a key polyisobutylene (PIB) manufacturer in India, effectively meeting approximately 80% of the domestic demand for conventional PIB. The company’s commitment to excellence and innovation became evident during the pandemic period when domestic demand faced challenges. KPL strategically expanded its presence in the Chinese and South East Asian markets, where its products were well received, particularly in the adhesive segment. The company intends to continue this strategic expansion with enhanced capacities, reinforcing its role as a global player in the petrochemical industry.
The Company’s clientele comprises prominent domestic lubricant manufacturers, 2T lube oil producers such as Lubrizol India Ltd, HPCL, BPCL, IOCL, and overseas market players like Infineum Singapore PTE Ltd.
Remarkable Financial Performance
Kothari Petrochemicals’ financial performance reflects its robust growth and unwavering commitment to delivering value to its shareholders. The company’s sales surged from ₹74 crore in June 2022 to ₹149 crore in June 2023, showcasing impressive growth. The operational profit in June 2022 was ₹4 crore, and it skyrocketed to ₹22 crore in June 2023, underlining the company’s financial strength and efficiency. The net profit exhibited substantial growth, increasing from ₹3 crore in June 2022 to a noteworthy ₹16 crore in June 2023, affirming KPL’s capability to generate sustainable profits.
Moreover, the company is poised to continue its growth trajectory with the expectation of delivering another strong quarter. Kothari Petrochemicals has consistently demonstrated its ability to deliver substantial profit growth, with a remarkable 31.8% CAGR over the last five years.
For investors exploring the potential of Kothari Petrochemicals, its impressive growth story and the factors driving its success make it an appealing choice. However, investment decisions should be based on thorough research and alignment with individual financial objectives.
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