KLRF - BACK TO BLACK

KLRF( Formerly Kovilpatti Lakshmi Roller Flour Mill) is known for its ‘KUTHUVILAKKU’ brand wheat flour in South India.Company has three divisions – Food Products ,Textiles and Engineering. Half of the turnover is coming from its food division .Its textile division is making cotton yarn and engineering division is making foundry and sheet metal products along with machinery for flour Industry .Due to sluggish demand for the products of its Textile and Engineering division ,company posted a loss in last financial year.Now company has taken various initiatives for modernization and expansion of its all divisions with a capital outlay of 6.5 crore. It also offered VRS from all these three divisions .Company’s efforts are showing good results and it came back to black in last two qtrs. Company is expected to turnaround in this FY . But the industry in which KLRF is operating is enjoying lower P/E in stock market. So it is a BUY only for low risk low profit seekers expecting dividend each years.CMP is around Rs.23/-