Shares of PTC Industries opened in the green and shot up 20% to hit the upper circuit. Its shares were locked at ₹ 3684.15 apiece. The company’s shares were already listed on the Bombay Stock Exchange (BSE) and they got listed on the National Stock Exchange (NSE) only on Friday, June 09, 2023.
PTC Industries is a leading supplier of high-precision metal components for critical and supercritical operations across a wide range of segments like aerospace, defence, and industrial, globally.
The company’s shares gained a massive 43.81% in the past week on the BSE, on the back of stellar results. Its profit after tax nearly doubled to ₹ 9.20 crores in the March quarter of FY23, against ₹ 4.62 crores in the corresponding quarter of FY22. Its total income grew 19 percent year-on-year (YoY) to ₹ 62.69 crores from ₹ 1.90 crore, indicating an increase of 3200%!
In a separate development, the engineering component manufacturer said that it is investing ₹ 300 crores to set up a titanium recycling plant in Lucknow as it is looking to be an aerospace and defence supplier.
Sachin Agarwal, Chairman and Managing Director of PTC Industries said that the proposed capital expenditure is over and above the existing ₹ 350 crore expansion at its titanium casting plant, and that the new investment is aimed at purely serving the aerospace and defence industry.
The proposed facility will come up over the next three to four years and will recycle the waste generated by the aerospace industry while making titanium castings. About 80-90 percent of titanium sponge is wasted while making titanium castings (buy-to-fly ratio). The company wants to reuse this waste as first-grade input and thus become the first company in India to be doing so. With this, India will become the third country after Russia and France to have this technology.
The company currently derives about 85% of its revenue from exporting metal castings. The rest comes from public sector defence and aerospace units like DRDO, HAL, Brahmos, Bharat Dynamics and Mazagaon Docks among others. Presently, it does not supply to private sector players.
PTC Industries is a small-cap company with a market capitalization of ₹ 4109 crores. It has a low return on equity of 10.87% but an ideal debt to equity ratio of 0.61. The company’s shares were trading at a price to earnings ratio (P/E) of 137.55, which is significantly higher than the industry P/E of 11.83, indicating that the stock might be overvalued as compared to its peers.
Written by Simran Bafna
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