Asian Granito recovers after slipping 13% in intra-day trade

The stock slipped 13% to Rs 162 as the Promoter and Managing Director Mukeshbhai Patel was arrested by Directorate of Revenue Intelligence on Friday, the company said in a release.

Shares of Asian Granito India rebounded on Monday after slipping 13% to Rs 162 per share on the BSE in intra-day trade following the company's promoter and managing director Mukeshbhai Patel arrest by Directorate of Revenue Intelligence on Friday for a case related to an amount of Rs 35 million.

Patel was released on bail on Saturday, the company said in a press release. 

Shares of the firm ended at Rs 179 apice on BSE, down 4 per cent. 

During the day, the stock inched towards its 52-week low of Rs 156 touched on October 9, 2018. It touched an all-time high of Rs 617 on January 15, 2018.

Thus far in the calendar year 2018, the stock has tanked 72% after reporting a weak set of numbers for the first half (April-September) of the financial year 2018-19 (FY19). In comparison, the S&P BSE Sensex was up 6% during the period.

Asian Granito India is engaged in the business of manufacturing and trading of ceramic wall, floor, vitrified tiles, marble and quartz.

The company posted 70% year-on-year (YoY) decline in its consolidated net profit at Rs 290 million in H1FY19, due to lower revenues and higher operational cost. Revenue from operations grew 3% YoY to Rs 2,825 million during the period. EBITDA (earnings before interest, tax, depreciation and amortisation) margin have been more-than-halved to 6.4% in H1FY19 from 13.5% in H1FY18.

Asian Granito said Q2 for the ceramic industry was very tough on account of a transportation strike in the second half of July 2018 and Kerala floods. The truck strike affected the Western part of the country more compared to other parts of the countries.

The excess capacity in the unorganised market remains a key challenge for the Industry. Further, a strict implementation of the e-way bill remains a key concern for the organised players, it added.

Impact of price rise and political uncertainty remain key worries for the sustainable demand in the coming months.

Profitability will depend on the acceptability of the recent price increase by majority players, however, long term margin outlook remain positive considering the passing of the higher input cost, increase in utilization of plants and rise in the sale of high value products (big format tile and Quartz), the company said.