SMEs take Indian Stock Market by storm

Small and Medium enterprises have been taking the Indian stock market by storm. With national programs meant to encourage domestic entrepreneurs to take the leap, it is the right time for new and budding investors to widen their investment portfolio as well. One the many promising companies that has come up in the mid cap section is the time tested paper manufacturing company from Ahmedabad- Kushal TradeLinks. Here we will explore what makes KTL one of the most promising names to invest in.

Kushal TradeLink Limited was formed in 2000. It is a privately held company focusing on dealings in various types of paper viz- Kraft, Duplex, News print waste, Cromo Art Paper etc.  These natural papers are used as a raw material which is extensively acclaimed by the newspaper agencies, packaging industry and various others. The KTL group consists of Kushal Infrastructure and Ashapura Paper Mills.

Their main products include Kraft Papr- Duplex Board, Coated paper and newsprint paper, all of which are being supplied nationally. Kushal Tradelinks has established its name and repute in the paper industry and was awarded the fastest growing Indian Company Excellence award at the International Achievers conference in Bangkok, Thailand 2014. The company currently has three stocking facilities located in Ahmedabad, Gujarat, with  processing facilities like sheet-cutting, rewinding, bailing, reel to sheet making etc and a wholly owned subsidiary in Singapore and  in Ajman(UAE) subsidiaries are involved trading of physical agricultural, chemicals, paper waste and metals trading.

The Promoters of the Company are Mr. Sandeep Agrawal and Mr. Mahendra Agrawal.  The company was first consolidated under the leadership of  Mr. Tulsiram Chiranjilal Agrawal who was a prominent paper supplier and trader. Beginning operations in 1965 as M/S Saraswati Trading Co. operating from Khadia, Ahmedabadit has been an uphill journey for the company. The company offered an IPO in 2013 following which there has been robust economic growth. The company has 6/9 Piotrsoki score indicating good financial health. Return on investment for 1yr, 3yr and 5yr stands at 12.69, 16.17 and 14.39. The company was awarded SME 2 level accreditation from CRISIL, implying high creditworthiness.  Being a midcap investment opportunity, the returns are high.

Kushal Tradelinks was one of the two companies which were recently shifted from the trading platform for small and medium enterprises to the main BSE trading platform. As per norms companies which have successfully met the criteria of completing two years on the BSE SME bourse and have post issue paid capital of more than Rs 10 crore, among others, are eligible for migration on the BSE main board.  The company is also listed on the Pantomath SMEX-30 which is a unique index for companies listed on the SME exchanges.

The Indian Printing Industry is growing systematically and is counted among the top seven publishing nations. The size of the Indian publishing and printing industry is estimated to be of Rs. 9,500 crore and ` 1,25,000 crore respectively. Several economic factors and lifestyle changes as listed below are driving the growth of paper consumption in India –

  • Growth in the education sector
  • Increased corporate activity and lifestyle changes
  • Growth in press publications
  • Increased demand for packaging
  • Growing affluence of the population.

The Revenues from Operations have shown encouraging trends  growing  from Rs. 6327.91 lacs in fiscal 2008-09 to Rs. 24403.95 lacs in fiscal 2012-13, representing a CAGR of 40.14%.  EBITDA has increased from Rs. 270.38 lacs in fiscal 2008-09 to Rs. 1458.62 lacs in fiscal 2012-13, representing a CAGR of 50.42%. PAT has increased from Rs. 63.67 lacs in fiscal 2008-09 to Rs. 408.56 lacs in fiscal 2012-13, representing a CAGR of 59.16%.

The paper manufacturing industry offers considerable space for Kushal Tradelinks to grow. The trusted leadership at KTL and encouraging performance over the years make it a highly sought after and smart investment option.

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