The shares of this smallcap company jumped upto 3 percent in Monday’s trading session after it announced that it is poised for growth as the Government of India announces a major infrastructure initiative.
Price Movement:
With a market capitalization of Rs. 7,732 crores, the shares of Responsive Industries Ltd started Monday’s trading session on a higher note at Rs. 297.50, gaining around 3 percent compared to its previous close of Rs. 287.90 and are currently trading at Rs. 289.95 apiece.
What Happened:
Such a positive movement in the share price was observed after the company in an exchange filing announced that it is set to witness significant business growth as the Ministry of Road Transport & Highways (MoRTH) announced the development of 75 tunnel projects across India.
The government has committed to invest Rs. 1 lakh crore for these initiatives, which are aimed at enhancing national infrastructure and connectivity.
The newly announced tunnel projects are part of the government’s ambitious infrastructure development plan, and the demand for high-quality, durable materials is expected to surge.
Furthermore, the company mentioned that, with its extensive experience and product excellence, it is well-positioned to supply PVC membranes for these projects, a critical component in ensuring the tunnels’ structural integrity and longevity.
The company also noted that constructing tunnels in challenging terrains demands specialized materials for safety and durability. Responsive Industries’ PVC membranes, which prevent water ingress and extend the lifespan of tunnels, are crucial for such large-scale infrastructure projects.
Moreover, the company also highlighted that the Government of India’s strong focus on infrastructure development is anticipated to create significant opportunities for Responsive Industries Ltd., including immediate supply contracts and potential long-term partnerships for future projects.
The company is already executing multiple projects across India, including high-profile initiatives such as the Rishikesh-Karanprayag rail link and the Rangpo Tunnel project in Sikkim, among others.
Financials:
Looking at the company’s financial performance, the revenue increased by around 11 percent from Rs. 288 crores during the March quarter to Rs. 320 crores in the June quarter. In addition, the net profits jumped by around 5 percent from Rs. 46 crores to Rs. 48 crores during the same timeframe.
Future Outlook:
As per reports, the company targets Rs. 2,500 crores in revenue by FY27, with an EBITDA margin of 22 to 23 percent. For FY25, it anticipates top-line growth of 20-30 percent while maintaining an EBITDA margin of 25 percent.
In addition to its core business of manufacturing vinyl flooring, Responsive Industries Limited also produces a diverse range of other products.
A significant portion of Responsive Industries’ business comes from supplying vinyl flooring for railway coaches. They provide flooring solutions for both conventional trains as well as new-generation trains like Vande Bharat.
In addition to railways, the company also manufactures vinyl flooring for metro rail coaches and buses. With the Indian government’s push for electric buses, Responsive Industries has seen strong demand from domestic bus manufacturers for their flooring products.
Currently, Responsive Industries derives approximately 25-30 percent of its revenue from the Indian Railways and electric bus sectors. The company aims to increase this share to 20-25 percent over the next year.
Company Profile:
Incorporated in 1982, Responsive Industries Ltd is a leading Indian manufacturer specializing in polyvinyl chloride (PVC) products, with a focus on three main verticals i.e., resilient vinyl flooring, synthetic leather, and specialized flooring solutions like stone plastic composite (SPC) and luxury vinyl tiles (LVT).
Written By Vaibhav Patil
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