Ace Investor Dolly Khanna Raises Stake in this Smallcap Metal Stock

US President Donald Trump's tariffs have introduced significant uncertainty into the global and Indian stock markets.

The potential for escalating trade tensions, particularly with China, has led to sharp declines and recoveries in stocks.

Even as the markets continue to remain volatile, investors are looking for value to enhance returns. Diligent efforts at stock picking remain important as markets are turbulent on account of tariffs being imposed by US President Trump.

In looking for good returns, investors are also examining what ace investors are doing. For such retail investors, there's an important piece of stock market news.

Ace investor Dolly Khanna recently increased her exposure in a metal stock.

Who is Dolly Khanna?

Dolly Khanna is a Chennai-based investor who is known for picking lesser-known midcaps and smallcaps. She has been investing in stocks since 1996.

Dolly Khanna's portfolio, which is managed by her husband, Rajiv Khanna, is usually inclined towards more conventional stocks in manufacturing, textile, chemical, and sugar stocks.

We recently wrote about Dolly Khanna's portfolio and the top 5 stocks she holds under Rs 250.

Which Stock did Dolly Khanna Increase her Stake in and why?

Dolly Khanna has recently increased her stake in Prakash Industries, a company specialising in steel production, mining, and power.

According to the latest shareholding pattern for March 2025, Khanna now holds a 2.1% stake in the company, reflecting a 0.8% increase from the previous quarter.

She first entered the stock in September 2023 quarter, where she held a 1% stake in the company.

While the precise reasons for her investment remain unclear, here are a few factors that can explain the decision.

#1 Bhaskarpara Coal Mining Begins

Prakash Industries has started the mining operations at its Bhaskarpara Coal Mine on 15 February 2025. The supplies of coal from the mine, is expected to result in substantial cost reductions and efficiencies in the company's integrated steel plant operations.

This being a commercial mine, the company will further benefit from sale of coal in the market, thereby resulting in higher profitability.

On 21 November 2024, Prakash Industries finalised a 30-year mining lease with the Chhattisgarh government.

The mine was reallocated to Prakash Industries Limited through an auction by the Ministry of Coal for use in its integrated steel plant in Champa, Chhattisgarh.

#2 FII Buying

The latest shareholding pattern of Prakash Industries reveals an increase in the stake held by Foreign Institutional Investors (FIIs) during the March 2025 quarter, with their holdings rising to 3.82%.

This marks an increase from the 3.69% stake they held in the December 2024 quarter.

Buying by FIIs is considered a good sign of investor confidence, as institutional investors typically conduct thorough research before making significant moves.

This uptick in FII holdings could have further strengthened Dolly Khanna's conviction to raise her stake in Prakash Industries.

A Close Look at the Financials

For the December 2024 quarter, its revenue jumped 4.6% to Rs 9.3 bn. Meanwhile, the net profit for the quarter came in at Rs 837.4 million (m).

Prakash Industries Financial Snapshot (FY20-24)

Year Ending	Mar-20*	Mar-21*	Mar-22*	Mar-23*	Mar-24*
Net Sales (Rs m)	29,736	32,159	39,287	34,438	36,778
Sales Growth (%)	-17.1	8.1	22.2	-12.4	6.8
Net profit (Rs m)	1,182	953	1,687	1,905	3,482
Net Margin (%)	4	3	4.3	5.5	9.5
Diluted EPS (TTM) (Rs)	6.6	5.3	9.4	10.6	19.4

Data Source: Equitymaster

Prakash Industries revenues have grown at a CAGR of 4%, rising from Rs 29,737 m in FY20 to Rs 36,778 m in FY24.

Prakash Industries net profit has been much better, increasing at a 24.8% CAGR between FY20 to FY24.

Net profit margins have also improved, more than doubling in the last 5 years to reach 9.5% in the last financial year.

What Next?

The commencement of mining operations at the Bhaskarpara Coal Mine is expected to result in substantial cost reductions and efficiencies in its integrated steel plant operations.

The company will further benefit from higher sales of coal in the market, thereby resulting in higher profitability.

The operations at the Bhaskarpara Coal Mine began on 15 February 2025, which should help fully reflect in the performance in the forth coming quarters.

However, it is pertinent to note that the ongoing trade war, particularly between the US and China, has significantly impacted metal stocks.

Tariffs imposed by the US on Chinese goods and China's retaliatory measures have led to concerns about reduced demand and increased costs for metal producers.

Deflationary pressures and potential recession fears are contributing to a fall in metal prices globally. This could pose a challenge for the company going ahead.

How Shares of Prakash Industries has Performed Recently

The shares of Prakash Industries, has dropped around 8% in the past one year. Over a month, the share price has jumped by 7%.

The share price touched its 52-week high price of Rs 237 on 27 August 2024. Its 52-week low was Rs 132.5 touched on 3 March 2025.

The company's share price is currently trading at a price to earnings (PE) multiple of 8 times.

About Prakash Industries

Prakash Industries is an integrated steel and power company in India with a focus on mining, steel production, and power generation. ? The company has a total steel manufacturing capacity of about 1 million tonnes per annum across its facilities.

Prakash Industries also operates a captive power plant utilising waste heat recovery boilers and fluidised bed boilers to meet its steel production energy needs.

The company is also engaged in iron ore and coal mining to ensure a steady supply of raw materials. It has recently commenced extraction from the Sirkaguttu iron ore mine in Odisha and Bhaskarpara coal mine in Chhattisgarh.

For more details, see the Prakash Industries company fact sheet and quarterly results.

You can also compare Prakash Industries with its peers.

Prakash Industries vs JSW Steel

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