Shares of this micro-cap stock, engaged in manufacturing packaging materials, hit the upper price band on Tuesday following the announcement of capacity expansion plans involving an investment of Rs.18 crore.
Price Movement
In Tuesday’s trading session, Shree Rama Multi-Tech Ltd’s share price hit the 2 percent upper circuit at Rs.27.38 per share, rising from its previous close of Rs.26.85 each. Over the past five year period, the stock has delivered returns exceeding 1,000 percent.
Capacity Expansion
The Board of Directors of Shree Rama Multi-Tech Ltd (SRMTL), in a meeting held on October 15, 2024, approved an investment in capital expenditure (CAPEX) for capacity expansion through the purchase of advanced tubing machines.
This investment is estimated at approximately Rs.18 crore, and aims to enhance the company’s production capabilities for various sizes and dimensions of tubes.
The existing operational capacity stands at 5 crore tubes per month, which is currently fully utilised. The proposed capacity addition will increase production by 20 percent, adding around 95 lakh tubes per month, with plans to complete this expansion within six months.
The required investment will be financed through internal accruals or loans from banks and financial institutions. The rationale behind this expansion is the consistent demand for the company’s products and the need to capitalise on growing market opportunities.
Product Portfolio
SRMTL offers a diverse range of packaging products, including multilayer tubes, seamless tubes, tube laminates, flexible laminates, self-adhesive labels, paper and plastic cups, and tarpaulin. The company is recognized for its advanced manufacturing technologies and commitment to quality, ensuring that its products meet international standards.
Financial Overview
In its latest financial update, the company reported remarkable net sales of Rs.42.98 crore for Q1 FY25, reflecting a slight 2 percent decrease from Rs.43.85 crore in Q1 FY24. However, net profits surged by 115 percent to Rs.4.20 crore in Q1 FY25, compared to Rs.1.95 crore in Q1 FY24, highlighting significant growth during this period.
About the Company
Incorporated in 1993, Shree Rama Multi-Tech Ltd (SRMTL) is a Gujarat-based integrated packaging company that manufactures laminated tubes and specialty packaging products. It has an installed capacity of 9,514 lakh multi-layer tubes.
It has more than 150 clients in India and abroad. SRMTL is a part of the Nirma group, which holds 61.57 percent stake in the company.
Written by – Siddesh S Raskar
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