Shares of this metal stock under the ‘small-cap’ category spiked approximately 11 percent in Friday’s trading session after the company received a composite licence for Iron Ore Block in the state of Maharashtra.
With a market capitalization of Rs 4,012.59 crores, the stocks of Sunflag Iron & Steel Company Limited started their trading session on Friday at Rs 203.95 and closed at Rs 222.65, gaining around 11 percent compared to the previous close of Rs 201.30 apiece. The scrip is inching near its 52-week high of Rs 248.95.
Such a sharp movement in the company’s stock price was observed after publishing a regulatory filing with the Bombay Stock Exchange (BSE) intimating the receipt of Letter of Intent (LoI) for grant of composite Licence for “Surjagad – 6 Iron Ore Block” in Ramunkal, Gadchiroli District, Maharashtra, over an area of 658 hectares.
Moreover, the LoI and the subsequent grant shall be subject to the provisions of the Mines and Minerals Act, 1957 and the Rules made there under, as amended from time to time.
During the recent quarters, the company has been successful in increasing its operating revenues as well as after-tax profits with the former moving up from Rs 784.46 crores during Q1FY23-24 to Rs 858.01 crores during Q2FY23-24, and, the latter, keeping the timeframe the same, rose from Rs 25.16 crores to Rs 38.5 crores.
As a result of the same, the profitability metrics of the company saw incredible growth with the return on equity (RoE) shifting from 14.81 percent during FY21-22 to 43.81 percent during FY22-23, and, the return on capital employed (RoCE) increasing from 17.84 percent to 50.78 percent.
As per the shareholding pattern for the September 2023 quarter, the company’s Promoters hold a 51.16 percent stake followed by the Public (retail) investors holding a 47.84 percent stake in the company.
Sunflag Iron & Steel Company Limited is engaged in the business of manufacturing and selling special steel-rolled products. Deriving a majority of revenue from domestic operations within India, the company offers flat & round bars, coils; rolled bars and wires, and many more.
Written by Amit Madnani
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