Shares of this Small-cap defence stock have proven to deliver multibagger returns within a period of two weeks. In the last five trading sessions itself, the scrip has zoomed 70 percent from Rs 511 to the current price level.
With a market capitalization of Rs 940 crores, the stocks of Premier Explosives Limited closed today at Rs 869.15 gaining around 10 percent compared to the previous closing levels of Rs 792.75 apiece.
The company’s scrip has delivered multibagger returns of 102 percent within a period of just 2 weeks, i.e., from the 4th of July 2023. The same means that a 1 Lakh investment into the stock would have converted to Rs 2.02 Lakhs within the above-mentioned period.
As per the information available on the BSE, the company has received orders aggregating to a value of Rs 640 crores till now in the month of July 2023 with the counterparty including the Ministry of Defence with an order size of around 630 crores and Bharat Dynamics Limited (PSU) with an order size of approximately Rs 10 crores.
Digging into the consolidated financials of the company, the operating revenues as well as after-tax profits have consistently increased in the past couple of financial years. The operating revenues marginally increased from Rs 199 crores during FY21-22 to Rs 202 crores in FY22-23, and, the net profit numbers rose from Rs 5 crores to Rs 6 crores keeping the timeframe the same.
Moreover, the basic profitability ratios such as the return on equity (RoE), as well as the return on capital employed (RoCE), have been on the rise with the former increasing from 2.79 percent during FY21-22 to 3.54 percent in FY22-23, and, the latter shifting from 6.84 percent to 8.53 percent
Premier Explosives Limited is involved in high-energy materials including commercial as well as defence explosives and the same are been used in the ‘Infrastructure’ and ‘Mining’ sectors. The company also manufactures missiles and other defence items. Having operations within and outside India, it derives a majority of its revenue from domestic operations within India.
Written by Amit Madnani
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