Analysis: Kamdhenu Limited

NSE:KAMDHENU Steel Products Market cap: ₹1.1K cr

Growth thesis

Kamdhenu is a steel products company generating recurring royalty income through a franchisee-based TMT bar distribution network. Key segments include franchisee sales (TMT bars, structural pipes), own manufacturing (1.25 lakh metric ton plant), and royalty income (INR435/ton in FY26). Growth will accelerate via 10-15% annual royalty rate hikes, 10% volume expansion from existing franchisees, and South India market share gains. Treasury funds will prioritize steel business reinvestment and shareholder rewards, while government infrastructure spending supports demand. The asset-light model with 26.8% ROCE and 78% franchisee capacity utilization positions the business for 20%+ EBITDA growth through 2028, though franchisee performance consistency remains a critical execution risk.

Why is Kamdhenu Limited stock rising?

  • Plan to increase royalty rate per ton by 10-15% annually, along with volume growth of approximately 10% per year
  • Focus on increasing capacity of existing franchisee units rather than adding new ones
  • Plan to increase market share in South India by adding more franchisees in that region
  • Framing a policy for treasury utilization and rewarding shareholders
  • No further investments planned in paint business; treasury to be used only for steel business and shareholder rewards

Research report

companyname: Kamdhenu Limited ticker: KAMDHENU sector: Iron and Steel Kamdhenu Limited was incorporated in 1994 and has since built a reputation as India's largest branded TMT bar player in the retail segment. The company manufactures and markets steel products including TMT bars, structural steel, and color-coated profile sheets. It operates through an asset-light franchisee model with over 80 franchise units that produce under the Kamdhenu brand, plus one own manufacturing plant in Bhiwadi. ...

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Catalysts

margin expansion, geographic expansion, market share gain

Growth guidance

FY27 royalty income growth guided at 10-15% annually driven by 10% volume growth and royalty rate increases

Guidance upgraded
RS rating: 93 Stage: Stage 2

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