Mumbai: TMT bar and paints maker Kamdhenu almost tripled its net profit for the March quarter rising on the back of significant increase in royalties as well as consistent demand for TMT coming from the infrastructure sector.
The company reported a 204% increase in profit at Rs 5.6 crore while revenue from operations increased by 55% at Rs 376 crore.
The asset light company that follows a franchisee model with its vast network of dealers and distributors in India saw its annual royalty income increase by half, pulling its annual net profit up by 93% at Rs 16 crore.
"This quarter we saw consistent demand for TMT bars coming from the phenomenal growth in the infrastructure segment," said Satish Kumar Agarwal, CMD at Kamdhenu. "A significant increase in royalties also added to the bottomline adding that the company aims to take royalty income to Rs 100 crore by 2020. It earned Rs 61 crore through royalty in 2017.
The company that also has a Rs 200 crore annual sales paints division aims at taking it to Rs 1000 crore in the next 4-5 years.
In the outlook for the current fiscal, Agarwal said that the company will be adding more franchisees in the units as well as backward integrate the rolling mills that will bring down costs.
It is banking on affordable housing to provide the TMT business with a boost.