Camlin Ltd began 78 years ago in 1931 in India with a single product and has grown to become a 200 product company over the years. It is one of the most well known art & stationery brands in the country with its headquarters stationed in Mumbai, Maharashtra.
As per the latest publicly available data, we found that unlike the previous quarter, the company’s revenue as well as PAT margins have shown significant growth. But the fact still remains that such growth has been unable to sustain the year to year comparison and there has been a 34% fall in the PAT margin as compared to the last year, the recovery path started needs to continue as it is doing now in order to reach the last year levels.
With rising interest cost and finance charges, we see that the company is treading the expansion path but it needs to make sure that debt crunch is avoided because there is no commensurate fall in costs owing to expansion. The share prices have been doing well above the Nifty movements but sustenance looks doubtful in the scenario of falling operating profits.
The company’s recent foray into an international deal with Kokoyu shall expand its distribution network and product portfolio as well. The prospects look bright but finances need to without more of debt. Acquisition of 51% stake by the Japanese company, Kokoyu brings some form of faith in the company’s future.
‘Bell the Bull’ says Kokoyu shall bring some brand equity into the company and volumes of activity of the stock shall pertain in the Nifty