The shares of Sterling Tools Ltd. surged 9.86% on Friday’s early trades to reach a 52-week high of ₹ 392.60 apiece on the Bombay Stock Exchange (BSE) following a strong business outlook by its management.
Sterling Tools is one of the largest automotive fastener manufacturers in India. It entered the electric vehicle (EV) space in 2020 and has become one of the largest e-2W MCU (Motor Control Unit) suppliers in India. Moreover, it supplies MCUs for LCVs.
The auto-component manufacturer’s share price surpassed its previous 52-week high of ₹ 390.60 apiece touched on February 03, 2023. Its shares were trading at ₹ 381.70 apiece up 7.11% at 12:26 PM on Friday.
In the past year, the company has given multibagger returns of 155.40% as its share price skyrocketed from ₹ 149.45 to the current levels. If an investor would have invested ₹ 1 lakh in the company’s shares a year ago, the value of their holdings would have been ₹ 2.55 lakh today!
The company’s consolidated profit after tax more than doubled to ₹ 40.1 crores from ₹ 18.7 crores reported in the corresponding period a year ago. It witnessed robust growth in its consolidated total revenue at ₹ 560 crores for the latest quarter, against ₹ 340.2 crores reported in the corresponding period last year.
The company’s management said that EV is the next big thing in the auto industry and the company is well positioned to expand its footprint in the vertical. The penetration of 2-wheelers and 3-wheelers is increasing at a fast pace, which augurs well for the company’s growth.
Its turnover touched ₹ 119 crores in the nine months ended December 31, 2023, against merely ₹ 7 crores in the corresponding period last year, indicating a jump of 1600%
The management said that the company will continue to focus on increasing sales in the EV vertical by developing new products, sharpening its engineering capabilities and by catering to new OEMs. This strategy would help it expand its market share.
What are analysts saying?
Analysts at HDFC Securities said that the company’s collaboration with Meidoh for high-tension fasteners could lead to higher orders from Japanese manufacturers. Further, the company has also invested in a 3-wheeler cargo EV manufacturer which is showing rapid growth and could lead to a valuation uptick.
They believe that investors can buy the stock in the ₹ 355-360 band and add on dips in ₹ 317-322 band for a bull case fair value of ₹ 425. This translates to an upside of 11.34% as compared to its current share price.
Written by Simran Bafna
The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Dailyraven Technologies or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
To stay updated with the Latest Stock Market news, download our app here!
For editorial purposes, contact email@example.com
Start Your Stock Market Journey Today!
Want to learn Stock Market trading and Investing? Make sure to check out exclusive Stock Market courses by FinGrad, the learning initiative by Trade Brains. You can enroll in FREE courses and webinars available on FinGrad today and get ahead in your trading career. Join now!!