Consumer Durables News

Surya Roshni: This small cap stock gained 92% from 52 week low; Is more upside left in the stock


Shares of Surya Roshni have delivered stellar returns to their shareholders, gaining 63.60 percent in the last six months, moving from Rs. 378.65 apiece to Rs. 619.50. From its 52-week low of 323 apiece marked on August 16, 2022, the stock rose nearly 94.73 percent to hit a new 52-week high of 629 on January 19, 2023.

The stock surged 19.50 percent over the past one year, surpassing the Nifty50 index by 17.46 percent, which returned 2.04% during the same period. In the current month so far, the stock produced a return of 26.40%. Also, it is up by 92% from one year low. 

Over the last three years, the stock generated a stunning return of 227%, while it increased by 39% over the previous five years.

Recently, on January 19, the company said that it had received an order worth 123.95 crore from Indian Oil for the supply of API-SL coated pipes and bare pipes in the state of Tamil Nadu.

Further, the company has also received an order worth 23.35 crore from GAIL for the supply of powder-coated GI pipes for the company’s City Gas Distribution project, CNBC TV18 reported.

Surya Roshni is a small-cap stock with a market capitalization of 3,370 crore. The company operates in the steel and lighting consumer durables division. 

The steel division manufactures electrical resistance welded (ERW) steel pipes and tubes, cold-rolled, formed sections and profiles, and cold-rolled (CR) strips. The lighting division manufactures fluorescent tube lamps (FTL) and more. The company exports its products to over 50 countries around the world.

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Stock price chart of Surya Roshni. (Tradingview)

For the December ending quarter, the company reported over two-fold increase in its consolidated net profit at 89.66 crore. The company posted a net profit of 40.49 crore in the year-ago quarter. Sequentially, the net profit was up by 0.21%.

The revenue from operations came in lower at 2,021.28 crore in Q3FY23 than at 2,030.30 crore in the corresponding quarter of last fiscal. The operating expenses fell marginally by 3.82% YoY to 1,859 crore.

The revenue from the lighting and consumer durables division rose 6.35 per cent to 395.73 crore from 372.07 crore in Q3 FY22, while revenue from the steel pipes and strips segment dropped 2.16 per cent to 1,625.55 crore in Q3 FY23, as against 1,661.47 crore earlier.

Following the company’s Q3 results, brokerage firm IDBI Capital maintained its “buy” rating on the stock and raised its target price to 760 apiece from 567 earlier, indicating a strong upside of 23%.

The brokerage pointed out that even though the revenue from steel pipes category fell, the EBITDA/t jumped 76% YoY due to an improvement in the product mix in favor of API and GI pipes.

Due to strong demand from the Oil & Gas, CGD, and water transportation sectors, the company is seeing a consistent flow of orders for API pipes and other value-added products. Surya Roshni currently has an order book worth over Rs. 7 billion (exports and API Pipelines), the brokerage stated. 

On the lighting and consumer durables division, the brokerage said that the rise in revenue came on the back of the company’s strong focus on the premium fan category.

Going ahead, the company has a strong pipeline to launch new products in lighting and consumer durables and also aims to focus on distribution to increase its presence in tier-1 cities, according to the brokerage. 

02 analysts polled by MintGenie on average have a ‘strongbuy’ call on the stock.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of MintGenie.

These are the types of ratios used to analyse a company's performance.  

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These are the types of ratios used to analyse a company’s performance.  

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