Agro stock jumps 3% after acquiring edible oil refinery in Mangalore for ₹105 Cr
In Tuesday’s trading session, shares of one of the leading agricultural stocks, specializing in the production and distribution of a wide range of edible oils, oilseeds, and other agricultural products, jumped by upto 3 percent following the acquisition of a fixed asset in the form of an edible oil refinery at Mangalore (NS:MRPL) from Sri Anagha Refineries Private Limited for an investment of investment of Rs. 105.53 crores.
Price action
With a market capitalization of Rs. 5,044 Crores on Tuesday, the shares of Gokul Agro Resources (NS:GOKG) is up by 2.9 percent making a low of Rs 335.95 per share compared to its previous closing price of Rs 326.25 per share
What Happened
Gokul Agro Resources Limited is a prominent player in the Indian agro-processing sector, specializing in the production and distribution of a wide range of edible oils, oilseeds, and other agricultural products.
Gokul Agro Resources Limited has announced the acquisition of a fixed asset in the form of an edible oil refinery at Mangalore from Sri Anagha Refineries Private Limited, with an investment of Rs. 105.53 crores to be financed through a combination of bank borrowings and internal accruals, and the company expects to complete the capacity addition within the next six months
This move is part of the company’s strategy to expand its market presence in Southern India, and the acquisition will increase its refinery capacity by 100 TPD (tons per day), bringing the total capacity to 5,650 TPD.
Gokul Agro Resources Ltd. is a prominent player in the Indian agro-processing sector, specializing in the production and distribution of a wide range of edible oils, oilseeds, and other agricultural products. Established with a focus on delivering high-quality products, the company operates through an integrated approach that spans sourcing, processing, and marketing.
It produces various types of edible oils, such as sunflower, soybean, and palm oil, catering to both domestic and international markets. Gokul Agro is known for its state-of-the-art processing facilities, which ensure that the products meet stringent quality standards.
Recent update
In Q2 FY24, it acquired a 1,350 TPD edible oil refinery plant in Haldia, West Bengal, through an NCLT e-auction from JVL Agro Industries Ltd., with operations beginning in March 2024, while in Q3 FY24, it commenced production at a 1,400 TPD edible oil refinery near Krishnapatnam Port, Andhra Pradesh, set up with a capital expenditure of Rs. 230 crore.
Future Outlook
The company plans to establish a presence in countries like Indonesia and Malaysia to better control its supply chain and expects to increase its reach with B2C sales, with the start of plant operations in new locations in West Bengal and Andhra Pradesh.
Financials
The company’s revenue declined by 16.8 percent from Rs 4,126.17 crore to Rs 4820.65 crore in Q2FY24-25. Meanwhile, Net profit rose from Rs 33.79 crores to Rs 71.48 crore during the same period.
Gokul Agro Resources Ltd. has an impressive Return on Equity (RoE) of 22.16 percent and a Return on Capital Employed (RoCE) of 30.3 percent. Furthermore, the company’s debt-to-equity ratio is 0.53.
This article was been republished from The Investing.