Shankara Building hits new low, again

Ever since Shankara Building Products announced its Q2FY19 numbers, the stock has been facing sellers only, with the stock consistently hitting new lows. All three days of this week, the stock has hit a new low and today, it made a new 52-week low at Rs.679. It is currently the top loser on the BSE.

The company, on a 13% (YoY) rise in revenue, posted a 47% drop in net profit at Rs.9 crore. This was mainly on account of an inventory loss of Rs.2 crore during the quarter on account of heavy rains and flooding in Kerala and South Karnataka.

Its focus on reducing credit sales also resulted in slower same store sales growth. Competition and inability to pass on higher raw material costs to customers too impacted the margins.

The company has come out with IPO in March 2017, offering shares at Rs.460 per share. And its good to know that even today, despite being beaten down, it remains over the IPO price.