Godawari Power & Ispat Limited (GPIL), in a recent exchange filing, mentioned that its Board of Directors have approved the buyback of upto 50,00,000 fully paid-up equity shares having a face value of ₹5 each at a price of ₹500 per Equity Share which is a 33% premium to the current price levels of the stock. The buyback amount mentioned above is payable in cash. The aggregate amount decided is not exceeding ₹250 Crores.
The company’s stock opened its trading session today at Rs 385 and is currently trading at a price of Rs 376.50. In comparison to the previous closing price of Rs 384.75, the current levels show a downfall of around 2.15 percent. With a purview of 6 months, the stock has performed well and delivered a return of around 35 percent to its stakeholders.
Godawari Power & Ispat is mainly engaged in the business of Iron Ore Mining and Manufacturing of Iron Ore Pellets, Sponge Iron, Steel Billets, Wire Rods, H.B. Wire, and Ferro Alloys along with the generation of Electricity. The company has two captive mines namely ‘Ari Dongri Mine’ & ‘Boria Tibu Mine’.
GPIL sources around 85% of its iron ore needs captively from its mines for the production of steel. The captive mining leads to huge raw material cost savings.
Evaluating the financials of the company, it can be observed that the revenues have shown an upward trend from Rs 1,307.14 crores in Q2 to Rs 1,462.99 crores in Q3. Net Profits, on a contrary note, have reduced from Rs 171.6 crores in Q2 to Rs 123.37 crores in Q3.
Another parameter is the profitability ratios of the company which have improved in the current financial year. Firstly, the Returns to the Equity shareholders have gone up from 35.71 percent in FY20-21 to 52.98 percent in FY21-22. Moreover, Returns on the Capital employed have also seen improvement from 34.34 percent in FY20-21 to 56.58 percent in FY21-22.
The debt to equity ratio of the company has witnessed a reduction from 0.44 in FY20-21 to 0.13 in FY21-22.
As of the quarter ending December 2022, promoters of the company have kept their stakes constant at 67.5 percent. On the other hand, FIIs have shown faith and increased their holdings from 2.53 percent in Q2 to 3.01 percent in Q3.
Written by Amit Madnani
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