Shares of this multibagger steel stock under the ‘small-cap’ category jumped 7 percent in Monday’s trading session after a well-known ace investor bought a fresh stake in the company. In the past month, the company’s stock has gained nearly 12 percent.
With a market capitalization of Rs 2,677.27 crores, the stocks of Prakash Industries Limited started their trading session on Monday at Rs 168.45 and currently trades at Rs 149.50, gaining around 7 percent compared to the previous close of Rs 140.40 apiece.
Such sharp bullish movements were witnessed after Ms. Dolly Khanna, one of the well-known ace investors based in India, bought a fresh stake in the company during the quarter that ended in September 2023.
According to the data available, she bought 17.98 lakh shares equating to a 1.00 percent stake in the company. Currently, the value of her investment stands at approximately Rs 27 crores.
Keeping a purview of just six months, the company’s stock has delivered multibagger returns of around 185 percent, i.e., if someone had invested Rs 1 lakh six months back, it would have converted to Rs 2.85 lakhs.
During the recent financial quarters, the company’s operating revenues rose marginally from Rs 1,010.54 crores during Q4FY22-23 to Rs 1,013.28 crores during Q1FY23-24. During the same time horizon, the company’s net profits rose at a much higher rate than the revenues from Rs 57.96 crores to Rs 89.41 crores.
Moreover, the profitability metrics of the company such as the return on equity (RoE) as well as the return on capital employed (RoCE) have increased at steady rates.
Being a capital-intensive sector, the RoE increased from 5.91 percent during FY21-22 to 6.61 percent during FY22-23, and, the RoCE, during the same timeframe, shifted up from 7.16 percent to 8.08 percent.
The latest shareholding pattern data of the company, as per the quarter ended June 2023, portrays the Promoters holding a 44.11 percent stake, and the Foreign Institutional Investors (FIIs), continuously increasing their stake each quarter, currently hold a 3.57 percent stake in the company.
Prakash Industries Limited is associated with the process of manufacturing as well as selling iron and steel products. The company’s product offerings include wire rods, TMT bars, sponge iron, ferroalloys, and many others.
Written by Amit Madnani
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