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1. At a Glance
Kothari Products is a 41-year-old trading house with a property portfolio, and the year ended March 2026 gave it a chance to prove it’s not a museum piece. The numbers say it’s learned to trade profitably again. But the bottom line — ₹33.2 crore of profit against ₹95 crore of losses the year before — is a narrative of recovery, not growth.
Sales at ₹1,010 crore stayed flat (up 5% year-on-year, but down 27% over five years). The real story lived in margin repair: operating losses shrank from ₹87 crore to ₹48 crore, and the company dragged itself back to positive PAT. Real estate associates contributed ₹30 crore, propping up consolidated profit. The trading division — 99% of revenue — was the bleeder and the healer both.
One tension: consolidated P&E sits at 19.8x against a peer median of 23.4x, and the company trades at 0.37x book. That’s not cheap; that’s a credibility gap waiting to close.
2. Introduction
The Kothari Group’s flagship emerged from the pan masala business three decades ago into trading and real estate. It arrived FY26 still writing off the damage of FY25 — the year the trading desk lost ₹95 crore and the consolidated balance sheet seized. A loss of that magnitude corrodes trust faster than time repairs it.
FY26 flipped the script. Net profit swung ₹128 crore into positive. EPS annualised to ₹5.56 (consolidated ₹5.17). The company approved a 1:1 bonus share split and began to divest its own subsidiary, KPL Exports, signalling a retreat to core.
Deepak Kothari still owns 59.3% directly; promoter holding sits unified at 75%. The public floats 25.01% across 12,183 shareholders. No FII. No dividend in two years — management chose to conserve cash.
This is a reboot year. Whether it sticks depends on whether FY26 was recovery or false dawn.
3. Business Model: WTF Do They Even Do?
Kothari Products does wholesale trading — import-export of commodities you won’t see on a supermarket shelf.
Coal. Electronics. Petroleum products. Metals. Tiles. Steel. Scrap. Transformers. Copier paper. Computer storage. Minerals. The company is a middleman to industrial buyers, rotating inventory at tight margins and living on velocity. FY26 saw 90% from trading, 4% from interest on loans to subsidiaries and associates, the rest scraps.
Geographically: 79% exports, 21% domestic. The export markets lock you into commodity pricing — you’re one ship away from a margin collapse. Recent quarters bore this out. Q4 operated at negative ₹16.6 crore, reversing a year of single-digit ups and downs. Volatility is the business model’s fingerprint.
Real estate is the second act: associates in Bangalore, Mumbai, Pune, Cochin, Kolkata, Vizag. The company owns stakes, collects rental income, and books equity-method gains. FY26 real estate associates produced ₹30 crore of consolidated profit — the only profit centre that worked.
A company built on two things that despise each other: commodity trading (high velocity, low margin, liquid) and real estate (slow cycle, property markup, illiquid). The first is about moving fast. The second is about waiting. Both tie up cash.
FY26 sales inched up 5%, the weakest two-year average in the company’s history. The trading unit moved ₹1,001 crore (99% of total), but operating profit was negative ₹16 crore — the year’s real albatross. Real estate associates, sitting outside the main P&L, salvaged the sheet by delivering ₹30 crore share-of-profit on equity method. Consolidated net profit hit ₹33.2 crore, but the bulk came not from operations but from paper gains in associate companies.
Tax was mild at 14% (vs 5.2% in FY25), suggesting prior-year adjustments were the noise, not ongoing tax rates.
5. Market Expectations & Historical Multiples
This section describes how the market is currently pricing the company and how that compares with its own history and peer group. It is descriptive, not predictive.
Metric
Current
5-Yr Avg
Peer Median
P/E
19.8x
13.6x
23.4x
EV/EBITDA
13.2x
—
—
Price-to-Book
0.37x
0.48x
—
ROE
1.9%
-0.71%
—
ROCE
2.63%
-5%
6.46%
The market currently pays 19.8x earnings here, against a peer band of 23.4x median. Historically, over the past five years, this company has averaged a 13.6x multiple — meaning the current price reflects more optimism than the company’s own average has warranted.
Price-to-book at 0.37x sits below historical 0.48x, signalling the market discounts the equity value. ROCE of 2.63% sits well below both the peer median (6.46%) and its own 5-year average (negative), capturing a business that extracts minimal returns from capital deployed. The peer set’s median P/E of 23.4x and median ROCE of 6.46% sketch a picture of commodity traders and trading houses that earn higher margins or scale that Kothari currently cannot match.
