Net profit has significantly increased by 326.96% from Rs.30.363 Mn in FY 2010/11 to Rs.129.64 Mn at the end of FY 2011/12. However 31st March 2012 Net Profits include other operating income of Rs.13.50 Mn. Net Profit Margin had increased by 4.18% YoY from 1.38% in FY 2010/11 to 5.57% at the end of FY 2011/12. The cash flow was negative at Rs.69.79 Mn as at of 31st March 2012.
ROE had increased by 23.53% from 9.91% in FY 2010/11 to 33.44% at the end of FY 2011/12. This suggests that the company’s performance is rewarding investors. The PE has decreased from 42.0 times on 31st March 2011 to 6.6 times as at 31st March 2012. The current PE of 5.6 times is lower than the industry average of 14.4 times. The stock is trading below its industry price and has a high potential to increase.
Net Asset per share has increased from Rs.38.00 on 31st March 2011 to Rs.53.23 at the end of 31st March 2012. The PBV has decreased from 3.9 times on 31st March 2011 to 1.9 times as at 31st March 2012. The current PBV of 1.6 times is lower than the industry average of 4.3 times. KFP’s share has decreased from Rs.150.00 on 31st March 2011 to Rs.100.00 as at 31st March 2012. This is mainly due to prevailing bearish market sentiments. The current price of the KFP share of Rs.74.30 is trading below both industry PE and PBV multiples. The share value based on company PE and PBV multiples using forecasted earnings for 2013 is Rs.91.63 and Rs.85.17 respectively. However the values based on industry discounted multiples of PE and PBV basis are Rs.196.35 and Rs.191.63 respectively. The share value based on industry multiples averages around Rs.193.99 in terms of 2013 forecasted earnings. Thus based on expected earnings and asset growth we are of the view that the share price will show growth in the medium to long term.