This Shapoorji Pallonji Group stock has zoomed 57% in 4 days

Forbes & Company stock update: The stock was locked at the 20% upper circuit in intra-day deals on Thursday, April 25.

Shares of Forbes & Company (FCL) were locked at the 20 per cent upper circuit at Rs 723.90 on the BSE on Thursday at 10:08 am; with only buyers seen at the counter.

The stock of household appliances company was trading higher for the fourth straight day, zooming 57 per cent during the period. The average trading volumes at the counter jumped three-fold with 39,000 shares changing hands. There were pending buy orders for 27,751 shares. The stock is listed only on the BSE.

Shapoorji Pallonji and Company Private Limited holds a 72.56 per cent equity stake in FCL as on March 31, 2024, the shareholding pattern data shows.

On March 7, 2024, the stock turned ex-date for the demerger of the precision tools business (within the engineering segment) from FCL.

FCL's standalone operations include the engineering business (comprising industrial automation and coding) and residential project development (Vicinia in Chandivali, Mumbai). In addition, FCL earns substantial income from its real estate holdings. It also has many subsidiaries, JVs, and associate companies. However, the company has undertaken various divestments and business discontinuations over the years.

Earlier this month, ICRA removed the FCL's instruments ratings from Rating Watch with Developing Implications, following the completion of the demerger.

FCL's steady flow of rental income from various rental properties, predominantly in Mumbai, which supports FCL’s credit profile, improvement in leverage (TOL/TNW of 2.1 times as of September 2023) and comfortable coverage metrics, according to ICRA. The company has no long term debt as on March 31, 2024.

While the Group has significantly downsized Forbes Technologies' operations and cost associated with it over the past 1-1.5 years, a meaningful and sustained turnaround in the operating performance of its standalone businesses along with improvement in overall scale of operations would improve FCL’s overall credit profile, ICRA said in its rating rationale.

Despite some delays in the completion of its sole ongoing residential project, Vicinia (Phase II), ICRA notes that the project has witnessed healthy bookings (98 per cent of the area sold as on December 31, 2023). The company is expecting inflows of Rs 20-23 crore from unsold flats, which is expected to be realised in FY2025.

The Stable outlook on the long-term rating reflects ICRA’s expectations that FCL will continue to maintain comfortable capital structure and debt coverage indicators over the medium term, aided by healthy revenue growth and improvement in operating margins.