SME Small-cap: Merged with Yamuna Bio Energy for strategic growth in biodiesel sector; green energy stock with multibagger returns in 1 year!

This is an SME Small-Cap stock with a market capitalization of Rs 858 crore. The stock is currently trading at Rs 982.

Kotyark Industries Limited, a prominent leader in the Indian biodiesel business, is pleased to announce the completion of its merger with Yamuna Bio Energy Private Limited, highlighting a strategic collaboration in pursuit of long-term growth and market share.

Kotyark Industries and Yamuna Bio Energy are both well-established biodiesel producers, with manufacturing plants in Rajasthan and Gujarat, respectively. The merger is expected to result in a synergy that leverages both firms' capabilities, resulting in a reduced cost structure and better joint manufacturing capacities.

The incorporation of Yamuna Bio Energy with Kotyark Industries would result in cost structure simplification, enhanced operational efficiency, and increased competitiveness in the biodiesel industry. The merger brings together the manufacturing capacities of both firms, bringing the total manufacturing capacity to 600 kl/day, with manufacturing sites strategically positioned in Rajasthan and Gujarat. This collaboration will allow for greater production capacity, assuring a strong response to OMCs' rising demand for biodiesel. The combined power of Kotyark Industries and Yamuna Bio Energy positions the merged business to win further biodiesel bids. Recent bids have shown an increase in demand for biodiesel blending from several Oil Marketing Companies (OMCs), indicating a profitable development prospect. Furthermore, the combined firm will have a stronger order book, thanks to the integration of Yamuna Bio Energy's order book and revenue visibility.

Furthermore, Kotyark Industries will successfully raise Rs 55.27 crores through a recent preferential issuance in which both promoters and non-promoter companies would participate, subject to shareholder approval at the EGM on January 6, 2024.

Its robust performance is underscored by a solid 22.24 per cent increase over the past month. Impressively, the company has outperformed expectations with a remarkable 72.69 per cent growth over the last three months. Looking at the broader picture, Kotyark Industries has delivered multibagger returns of 127.42 per cent over the past year.

This is an SME Small-Cap stock with a market capitalization of Rs 858 crore. The stock is currently trading at Rs 982, with the company having a good return on equity (ROE) track record where it delivered an ROE of 35.7 per cent in the last 3 years maintaining a healthy dividend payout of 19.1 per cent.

Management Commentary

“The amalgamation of Yamuna Bio Energy Private Limited with Kotyark Industries Limited marks a significant milestone in our journey toward sustained growth and success in the biodiesel sector. By combining our resources, expertise, and manufacturing capacities, we are poised to take advantage of emerging opportunities and contribute to the increasing demand for environmentally responsible fuels from the OMCs and providing mileage to the Government of India’s 5 per cent blending targets of biodiesel in diesel by 2030.”

About company

Kotyark Industries Limited, incorporated in 2016, is engaged in the manufacturing of biodiesel and its by-products, and is one of the key players across the state of Rajasthan in India. The Company focuses on green energy and sustainable development of renewable resources (biofuel) through the adoption of environmentally friendly technology. It has two manufacturing units in Rajasthan & Gujarat with a cumulative capacity of producing 600 KL of biodiesel per day from multi feedstock.

Disclaimer: The article is for informational purposes only and not investment advice.