Shares of Elgi Rubber Company Limited zoomed 7 percent today and currently trade at Rs 39.20. In the last 5 trading sessions, the stock has moved up around 4.5 percent from Rs 37.50 to the current levels.
The surge in stock prices today is observed due to the production buzz in the ‘Natural Rubber’ industry in India. According to figures available from the Rubber Board, production in the country has gone past the 800,000-tonne mark in 2022-23, which is recorded after a gap of 10 years.
Apart from the same, the Central Government has, through its Budget, helped the rubber industry players by increasing the import duty on the products from 10 to 25 percent creating demand for the local entities present. The Government is also considering increasing the subsidies provided from the current level of Rs 25,000 per hectare.
As a result of the same, the Elgi’s stock has gained approximately 20 percent since the Budget announcements showing a movement from Rs 32.75 to what the share price stands today.
Elgi Rubber Company Limited is engaged in the business of providing solutions to the Rubber Industry and manufactures Reclaimed and Retread rubber, Retreading machinery, etc. Geographically, the company derives a majority of its revenue from domestic operations within India. The company sells its product under various brands such as Westernweld, Armonas, Rubber Compounding Holland, etc.
Having a quick glance at the past annual financials of the company, the revenues have increased from Rs 343 crores during FY20-21 to Rs 390 crores in FY21-22. Net profits of the company were reported at Rs 1.08 crore during FY20-21 and shifted to net losses of Rs 16.3 crores during FY21-22.
To mention the above-mentioned metrics, on a quarterly basis, the revenues have slightly dipped from Rs 98 crores in the June quarter to Rs 97 crores in the September quarter. On a contrasting note, the net profit figures have shown a good amount of improvement from Rs 0.20 crores to Rs 5.6 crores during the same period.
Written by Amit Madnani
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