KOTHARIPRO - Kothari Products

📊 NSE: KOTHARIPRO 🏢 Trading 📅 Last Updated: 12/14/2025 9:01

💰 Financial Performance

Revenue Growth by Segment

Consolidated revenue for H1 FY26 reached INR 531.27 Cr, representing a 3.45% growth compared to INR 513.54 Cr in H1 FY25. The Trading segment revenue grew 12.31% YoY to INR 530.34 Cr from INR 472.20 Cr. Conversely, the Real Estate and Other segment revenue declined 24.92% to INR 39.94 Cr from INR 53.20 Cr in the same period.

Geographic Revenue Split

The company operates through international trading hubs, specifically via Kothari Products Singapore Pte. Ltd., which reported a standalone revenue of INR 362.62 Cr for H1 FY26, contributing approximately 68% to the consolidated revenue.

Profitability Margins

Net Profit Margin for H1 FY26 stood at 3.69% (INR 21.05 Cr profit on INR 570.28 Cr total income), a significant recovery from a net loss of INR 95.19 Cr in H1 FY25. Historical PAT margins in FY19 were 2.13%, improving from 0.87% in FY18 due to decreased costs of traded goods.

EBITDA Margin

PBILDT margin was reported at 3.83% in FY19, an improvement from 1.86% in FY18. This 106% increase in core profitability was driven by better procurement pricing and a shift in the traded product mix.

Capital Expenditure

Property, Plant, and Equipment (Standalone) stood at INR 13.33 Cr as of September 30, 2025, up from INR 10.73 Cr in March 2025, indicating a modest capital outlay of INR 2.60 Cr during the half-year.

Credit Rating & Borrowing

The company previously held a CARE BBB-; Negative (Long Term) and CARE A3 (Short Term) rating, which were reaffirmed and subsequently withdrawn in August 2019 at the company's request after repaying bank limits. Consolidated borrowings stood at INR 143.02 Cr as of September 2025.

⚙️ Operational Drivers

Raw Materials

Traded goods including Coal, Steel, Polyvinyl Chloride (PVC), Edible Oil, Metals, and Agro-based commodities. The cost of stock-in-trade represents 99.57% of operational revenue, amounting to INR 529.00 Cr in H1 FY26.

Import Sources

International markets including Singapore (via Kothari Products Singapore Pte. Ltd.) and various global origins for commodities like coal and steel.

Key Suppliers

Not specifically named in the financial results, but the company maintains established relationships with global commodity suppliers for back-to-back trading arrangements.

Capacity Expansion

Not applicable as the company is primarily a trading entity; however, Investment Property (Real Estate) was valued at INR 31.23 Cr as of September 2025.

Raw Material Costs

Cost of traded goods was INR 529.00 Cr in H1 FY26, a slight decrease of 1.86% from INR 539.03 Cr in H1 FY25, despite higher revenue, indicating improved procurement efficiency.

Manufacturing Efficiency

Not applicable for trading; however, inventory management is efficient with an inventory holding period of approximately 12 days as of FY19.

Logistics & Distribution

Distribution costs are integrated into the cost of traded goods and other expenses, which totaled INR 128.02 Cr in H1 FY26.

📈 Strategic Growth

Expected Growth Rate

Not disclosed in available documents

Growth Strategy

Growth is pursued through the expansion of the international trading portfolio (Coal, PVC, Steel) and leveraging the 40+ years of experience of promoter Mr. Deepak Kothari. The company is also diversifying into real estate development and leasing through subsidiaries like Viren Ventures and Subhadra Realtors to create stable rental income streams.

Products & Services

International trading of Coal, Agro-commodities, Storage devices, Transformers, Edible oil, Steel, Tiles, PVC, and Metals; Real estate leasing and development.

Brand Portfolio

Pan Parag (Historical association/legacy brand).

New Products/Services

The company has expanded into specialized trading of transformers and storage devices, though specific revenue contribution percentages for these new lines are not disclosed.

Market Expansion

Focus on Singapore as a global trading hub to facilitate international commodity movements.

Strategic Alliances

Operates through various subsidiaries and associates including Kothari Products Singapore Pte. Ltd., Viren Ventures Pvt. Ltd., and Savitry Hotels Pvt. Ltd.

🌍 External Factors

Industry Trends

The wholesale trading industry is moving toward tighter margins and higher volume requirements. KPL is positioning itself by maintaining low inventory (12 days) and diversifying into real estate to offset the volatility of the trading business.

Competitive Landscape

Competes with other large-scale international merchant traders and domestic commodity houses.

Competitive Moat

The moat is built on the 'long track record' (since 1973) and 'extensive experience' of the promoters, which facilitates access to credit lines and established supplier-buyer networks. This is sustainable as long as the company maintains its creditworthiness and relationship capital.

Macro Economic Sensitivity

Highly sensitive to global commodity price cycles (Coal, Steel) and international trade policies. A slowdown in global GDP would reduce demand for industrial inputs like PVC and Steel, impacting trading volumes.

Consumer Behavior

Shift toward sustainable energy may impact the long-term demand for coal trading, which is a key product for the company.

Geopolitical Risks

Trade barriers or sanctions on commodity-exporting nations could disrupt the supply of coal and agro-products, affecting the company's ability to fulfill back-to-back contracts.

⚖️ Regulatory & Governance

Industry Regulations

Subject to international trade regulations, import/export duties on commodities like coal and steel, and RERA regulations for its real estate segment.

Taxation Policy Impact

The company maintains current tax liabilities of INR 9.96 Cr as of September 2025. It is subject to standard Indian corporate tax rates and Singaporean tax laws for its foreign subsidiary.

Legal Contingencies

The company is involved in various legal matters as part of its business; however, the statutory auditors (G.M. Kapadia & Co.) provided an unmodified opinion for the H1 FY26 results, suggesting no immediate material financial threats from litigation.

⚠️ Risk Analysis

Key Uncertainties

The 'Negative' outlook from credit agencies (prior to withdrawal) was due to 'subdued operational performance' and 'high exposure to group entities' in the form of loans, advances, and corporate guarantees.