Rs 117 to Rs 1,246: This defence stock turned into a multibagger in three years

Shares of Premier Explosives Ltd have delivered multibagger returns to investors ranging from short to long term. Premier Explosives stock has clocked 198% returns (six months) to 2,060% returns (10 years), making it among the top bets in the defence sector. The stock has gained 169% in a year and zoomed 198% this year. The defence stock logged 967% returns in three years.  

The multibagger stock, which closed at Rs 116.75 on October 30, 2020 hit a high of Rs 1246.15 today, delivering 967% returns during the period. An amount of Rs 1 lakh invested in the Premier Explosives stock three years ago would have turned into Rs 10.67 lakh today. In comparison, Sensex has risen 62 per cent during the period.   

The stock will be in focus on Tuesday after the firm reported its Q2 earnings.  

In the September 2002 quarter, net profit zoomed 346% to Rs 11.6 crore  against Rs  2.6 crore in the September 2022 quarter.  

Revenue rose 29.32% to Rs 78.41 crore in the September 2023 quarter against Rs 60.63 crore in Q2 of the previous fiscal.  

Premier Explosives has a strong order book of Rs 1,054.4 crore, 5.21 times of FY23 revenue. Of the total order book, defence segment forms the majority at Rs. 884.16 crore, Explosives segment stands at Rs 51.22 crore and Service segment at Rs 119 crore. 

Operating profit zoomed 204% to Rs 21.8 crore in Q2 against Rs 7.2 crore in the September 2022 quarter.  

Profit before tax rose 356% to Rs 16.16 crore in September 2023 quarter against Rs 3.54 crore in the September 2022 quarter  

Earnings per share climbed to Rs 10.83 in Q2 against Rs  2.40 in the September 2022 quarter.  

The defence stock closed 5% higher at Rs 1246.15 on Monday against the previous close of Rs 1186.85 on BSE. Total 7692 shares of the firm changed hands amounting to a turnover of Rs 95.02 lakh on BSE today. Market cap of the firm rose to Rs 1339.89 crore.   

Premier Explosives shares have a beta of 0.8, indicating very low volatility in a year. 

In terms of technicals, the relative strength index (RSI) of the stock stands at 60.3, signaling it's trading neither in the overbought nor in the oversold zone. The share is trading higher than the 5 day, 20 day, 50 day, 100 day and 200 day moving averages. 

Premier Explosives Limited is primarily engaged in the manufacture of high energy materials and allied products for the defence, space, mining and infrastructure industries. The company's geographical segments include India and the Rest of the world. It is focused on developing and manufacturing solid propellants for rockets and strap-on motors for satellite launch vehicles. 

 

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