Mukand Ltd, which had closed yesterday at R.40.10, opened itself 5% higher at Rs.42.10, hitting its UC of the day. Its not to far from its 52-week high of Rs.51.50.
The market is very happy with the Chairman’s letter to the shareholders where he has communicated that things are indeed looking good ahead.
He said, “Mukand is the market leader in the manufacture of specialty steel long products in the Country supplying leading automobile and auto component manufacturers. As you may be aware, the demand for two wheelers and passenger cars which was sluggish since November 2018, has accelerated with great speed since August 2020. This has led to a substantial increase in the demand for our special steel products which has already exceeded our production capacity in the month of September, 2020. With the expected and sustained higher demand Countrywide of two and four wheelers, we expect the demand for our products to remain strong.”
The company has formed a JV in May 2018 with Sumitomo Corporation, Japan and now the company is looking at divesting its 51% stake for a consideration of approximately Rs 1,200 crore to one or more Promoter Group Companies. This divestment will be completed in tranches over the next one year. It will reduce the company’s debt by around Rs 1,200 crore.
The company is also close to finalising the sale of 100 acres of its surplus land at Dighe, Thane and has finalised the sale of 42 acres of its surplus land at Sinnar, Maharashtra. Its expects significant further reduction in debt and interest costs as these transactions materialise over the coming months.
The company expects FY21 to be a turning point.