Kinetic Eng hits the roof

During the last almost entire week, Kinetic Engineering was hitting a new low and since yesterday, the tide seems to have turned. Yesterday, the stock hit the upper circuit at Rs.35.20 and today too, the moment it opened it hit the 5% upper circuit at Rs.36.95.

This turnaround from lower circuit to upper circuit has happened after the company stated that it has sold its remaining 20% stake in Mahindra Two Wheelers to PE Fund, Samena Capital.  The company has stated in the Press Release issued that it will receive about Rs.182 crore for the stake sale. After certain committed payments including repayments of non-convertible debentures and cost of financing, net proceeds would amount to about Rs.109 crore.

This money will be used by the company to meet various obligations of this business including working capital and FCCB /debt repayment requirements to strengthen its balance sheet. Financially, the company remains on a weak wicket, as it posted a consolidated net loss of Rs.8 crore on a 37% decline in net sales at Rs.13 crore. The company is yet to declare its Q3 numbers, which is expected to be released tomorrow.