1. At a Glance – Steel with Royalty Masala
₹618 crore market cap.
Current price ₹21.8.
Stock down 17.8% in 3 months and 30% in 1 year.
P/E at 7.93 vs industry median ~20+.
ROCE at 28.9%.
ROE at 22%.
Debt: practically nil (₹0.57 crore).
And then Q3 FY26 arrives like a Bollywood comeback scene:
- Revenue: ₹168.8 crore (-3.5% YoY)
- PBT: ₹26.8 crore (+58%)
- PAT: ₹20.8 crore (+67%)
- PBT Margin: 15.9% (vs 9.7%)
So sales slightly down, but profits dancing at a wedding.
How does a steel company grow profits 67% when revenue falls?
Welcome to the Kamdhenu franchise royalty circus.
2. Introduction – The Steel Brand That Doesn’t Like Steel Plants
Kamdhenu Ltd started in 1994 with a steel plant in Rajasthan. Like every other steel company, it began with furnaces, ingots and dreams.
Then it did something unusual.
Instead of building 50 giant factories like typical steel players, it said:
“Why don’t others build factories… and we just build the brand?”
And thus began the franchise model.
Today:
- 100+ franchisees
- 10,000+ dealers
- 500+ distributors
- ~40 lakh MT rebar capacity via franchisees
- Royalty income FY25: ₹139 crore
They manufacture only ~1.2 lakh MT in-house. The rest? Outsourced under brand control.
It’s like being the Shah Rukh Khan of steel — others do the heavy lifting, you collect the applause (and royalty).
But here’s the real question:
Is this a genius asset-light model… or just steel trading dressed as branding?
Let’s dig.
3. Business Model – WTF Do They Even Do?
Kamdhenu operates in two major ways:
1️ Manufactured Steel (82% of FY24 revenue)
Produced at:
- Owned plant (Bhiwadi, Rajasthan)
- Franchisee plants across India
Products:
- TMT bars
- Structural steel
- Colour coated sheets
2️ Royalty Income (18% of FY24 revenue)
This is the magic.
Franchisees:
- Manufacture steel
- Use Kamdhenu brand
- Follow quality norms
- Sell in designated regions
Kamdhenu:
- Provides branding
- Provides dealer network
- Provides R&D support
- Collects royalty
Royalty income region-wise FY25:
- North ~31%
- South ~15%
- East ~34%
- West ~20%
So Kamdhenu earns
