Rs 191 to Rs 842: This steel stock turned into a multibagger in three years; hit record high today

Shares of multibagger Godawari Power & Ispat have delivered 339% percent returns to investors in the last three years. The stock of the steel producing major, which closed at Rs 191.76  on April 16, 2021 ended at Rs 842.65 on April 18, 2024. In comparison, Sensex has risen 48.45% in three years. In the current session, Godawari Power stock closed flat on BSE. Earlier, the stock opened higher at Rs 858.45 against the previous close of Rs 846.65 on BSE.

The steel and power manufacturer’s stock has gained 126% in a year and risen 9% in 2024. Total 0.28 lakh shares of the firm changed hands amounting to a turnover of Rs 2.38 crore in the current session. Market cap of the firm stood at Rs 11,455 crore. The stock hit a 52-week low of Rs 353 on May 2, 2023  and scaled a record high of Rs 867 in today’s trade.

Shiju Koothupalakkal - Technical Research Analyst at Prabhudas Lilladher said, "The stock has recovered quite significantly from the low made near Rs 660 zone and has moved past the moving averages of 50EMA and 100 period MA at 720 and 727 levels respectively, to improve the bias with currently, indicating a breakout above the previous peak zone of Rs 844 level to further strengthen the trend. With the RSI on the rise has attained the highly overbought zone and after some consolidation or some profit booking expected, one can anticipate for further rise having targets of Rs 915 and Rs 970 levels in the coming days keeping the stop loss of Rs 826 from current levels."

Osho Krishan, Sr. Analyst- Technical and Derivatives Research at Angel One said, "Godawari Power Ispat has surged nearly 13 percent in the current month and soared to a record high zone. The stock recently has witnessed a breakout above the 800 zone, but with the stellar rally, it entered overbought terrain on the technical front, suggesting a possibility of cool-off in the near period. Hence, it is advisable to maintain caution at elevated levels. While on the lower end, any dip towards Rs 800- Rs 780 is likely to attract buying traction once again."

Abhijeet from Tips2trades said, "Godawari Power stock price looks bullish but also overbought on the daily charts with next resistance at Rs 897.Investors should keep booking profits as a daily close below the support of Rs 832 could lead to a target of Rs 735 in the near term."

Godawari Power shares have a beta of 0.5, indicating low volatility in a year. 

In terms of technicals, the relative strength index (RSI) of the stock stands at 74.7, signaling it's trading in the overbought zone. Godawari Power shares stand higher than the 5 day, 20 day, 50 day, 100 day and 200 day moving averages.  

In the December quarter of last fiscal, Godawari Power posted a 79.46%  rise in net profit to Rs 229.3 crore against Rs 128.2 crore profit in the December 2022 quarter .

Sales slipped 11.63% to Rs 1324.7 crore in Q3 against Rs 1499.1 crore during the quarter ended December 2022.  However, EBITDA margins rose to 25.28 percent in the December 2023 quarter compared to 11.83 percent in the year-ago period. 

About the Company    

Godawari Power is a steel company which operates through two segments: Steel and Electricity. Its geographic segments include domestic market and export market. The company is engaged in iron and steel industry, power sector and mining sector.