Friday 8 April 2016

#SMEinvest : Kushal Tradelink Ltd

Small & Medium Enterprises are the backbone to the economy of India. With the allocation of 3 lakh crores from government of India, the SMEs or start ups are expected to outperform in coming years. This week, The Indian Capitalist tells the story of an Ahmedabad based Kushal Tradelink Ltd (KTL) which can be an opportunity for the investors and an epitome of a success story for the new established businesses.

Kushal Tradelink is one of the leading wholesalers in Ahmedabad for paper and paper products. The company was incorporated in the year 2000 and is promoted by Mr. Sandeep Agarwal. Its sole business comprises of Kraft paper, Waste paper and Duplex board. Kushal Tradelink Ltd caters to the market of Gujarat and has existing clientele base of over 1500 reputed customers.

Kushal Tradelink’s stocking and processing facilities are ISO 9001:2008 compliant. KTL’s credit rating stands at BBB (Investment Grid) with the outlook stable from leading rating agency. In FY 2013, the company came up with Initial Public Offering which was successfully subscribed and subsequently listed on SME platform of Bombay Stock Exchange. Since then, the stock price of Kushal Tradelink has seen positive growth and current stock price stands at Rs 125.20.

Pic - Stock performance Q4 FY 2015

TIC’s take

Positive traction is expected in KTL’s stock as net tangible profit is expected to soar due to import pressures. Nominal sell off is expected in Kushal Tradelink due to profit booking as the company recently declared its second interim dividend.

With over 20,000 shareholders, Kushal Tradelink Ltd is a trusted brand on the bourse. The company has declared Rs.250 crore supply deal with Shree Rama Newsprints and Rs.1000 crore deal with Bunge India Pvt Ltd. The company has also announced an undisclosed amounted deal with Adrion Enterprise Pvt Ltd.  

Indian Paper industry has evolved into Agro-based industry from its earlier character of a forest-based industry. Indian paper industry accounts for about 1.6% of the world’s production of paper and paperboard. The estimated turnover of the industry is Rs. 25,000 core (USD 5.95 billion) approximately.

Major analytical firms like Nomura, JP Morgan and UBS are of an view that the worst of the Indian stock market is over and the market will see a bounce back. The Indian Capitalist is of a similar view and we expect BSE Sensex to reach 28,500 by Diwali. BSE Midcaps and SME will outperform in the rally.

Government of India’s decision to allow 100% FDI in newspaper and magazines would bring movement in net sales of news print papers and coated papers.With ease of regulation and industry partnerships, the scrip of Kushal Tradelink Ltd is expected to reach par Rs.170. The Indian Capitalist gives Buy status to the stock of Kushal Tradelink Ltd.

Disclaimer – We have provided all information based on our research and we do not have any holding. Please consult your financial advisor before making any investment decision.

By – Chaitanya Kulkarni ( )


  1. ACC Q1 consolidated net profit down 4% (YoY) .
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  2. Yup. Cement business in India is trouble. Braj Binani rated D by Crisil.

  3. Maruti Suzuki disappointed analysts with its October sales as it sold 1.33 lakh units during the month, down 0.3 percent compared with 1.34 lakh units sold in year-ago period, dragged by exports and muted growth in domestic sales. It was worst on month-on-month basis as sales fell 10.3 percent. Equity tips