Share of Rajratan Global Wire Limited has delivered 604 per cent return to its shareholders in the last 12 months. The share stood at Rs 250.55 on July 20, 2020. It has zoomed to Rs 1,764.95 today, translating into gains of 604 per cent during the period.
In comparison, Sensex rose 39.5 per cent in one year. Rs 1 lakh invested in the share a year ago would have turned into Rs 7.04 lakh today.
The stock rose 5 per cent to hit an intraday high of Rs 1764.95 on BSE today after the company posted healthy June quarter results. The stock has gained 110 per cent in the last three months and risen 304 per cent since the beginning of this year.
With a market capitalisation of Rs 1,792 crore, the share stands higher than 5 day, 10 day, 20 day, 50 day, 100 day, and 200-day moving averages.
According to MarketsMojo, the company has declared positive results for the last four consecutive quarters and has a high Return on Capital Employed (ROCE) of 17.58%. The technical trend has improved from Mildly Bullish on May 31, 2021, and the stock is technically in a Bullish range now and has generated a 74.39 per cent return since then. Multiple factors for the stock are Bullish like MACD, Bollinger Band, KST, DOW and OBV.
Along with generating 604 per cent return in the last 1 year, the stock has outperformed BSE 500 in the last 3 years, 1 year and 3 months. However, it noted that the valuation is expensive right now.
The company posted a net profit of Rs 21.92 crore for the quarter ended June 2021 as against a net profit of Rs 1.65 crore in June 2020. Net Sales stood at Rs 182.29 crore in March 2021 compared to Rs 64.65 crore in March 2020. The earning per share (EPS) has increased to Rs 21.58 in June 2021 from Rs 1.62 in June 2020.
Rajratan Global Wire has signed a memorandum of understanding (MoU) with the Tamil Nadu state government for setting up of new manufacturing facility in Southern India. The company also intends to broaden its customer base across the USA and Europe and noted that the Indian tyre companies are returning to peak capacity utilisations.
“Despite FY 2021-22 starting off on a challenging note led by an impact from the second wave of Covid-19, the company has delivered strong performance and growth. This was primarily driven by strong demand from domestic tyre manufacturers as well as exports," said Mr. Sunil Chordia, CMD, Rajratan Global Wire Ltd.
"Our timely expansion in India in FY20 (to 72,000 TPA) has started bearing fruits for us as we are aiming to increase the capacity utilisation levels over the current year and next year for the expanded capacity at Pithampur, Madhya Pradesh,” he noted.
“Similarly, we have now taken up the expansion of our capacity in Thailand from 40,000 TPA to 60,000 TPA owing to our increased traction in the region as well as increasing market share. Post this expansion (expected by end FY22), Rajratan will become the second-largest bead wire manufacturer in Asia outside China with a combined capacity of 120,000 TPA (for bead wire)," he added.
Rajratan Global Wire Limited is an India headquartered tyre ancillary, manufacturing bead wire, a critical component used in the manufacture of tyres. Based out of Indore, Madhya Pradesh, the company has a production capacity of 72,000 TPA of wire (largest bead wire manufacturer) at a single location in India and 40,000 TPA at a single location in Thailand.
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