Shares of Usha Martin jumped 9.29 percent on Tuesday’s early trades to reach an intraday high of ₹ 296.45 apiece, after brokerage firm Motilal Oswal bought a stake in the company. At 12:39 PM, its shares were trading at ₹ 285.45 a piece.
According to the bulk deals data on the National Stock Exchange (NSE), Motilal Oswal Mutual Fund (MOSTF30), bought 18.5 lakh shares of the company at an average price of ₹ 270.12 per share, which amounted to nearly ₹ 50 crore.
Usha Martin manufactures and sells steel wires, strands, wire ropes, cords, related accessories and so on. In addition, it sells products such as wire drawing and allied machines.
In the past year, the company’s shares gave multibagger returns of 172 percent, as their share price increased from ₹ 105.00 apiece to the current level. Thus, if an investor had invested ₹ 1 lakh in the company’s shares a year ago, the value of their holdings would have been ₹ 2.72 lakhs today!
With a market capitalization of ₹ 8,266 crores, Usha Martin is a small-cap company. It has an ideal return on equity of 18.80 percent and an ideal debt-to-equity ratio of 0.21. Its shares were trading at a price-to-earnings ratio (P/E) of 23.59, which is significantly higher than the industry P/E of 11.83, indicating that it might be overvalued as compared to its peers.
The company’s promoters hold a 48.26 percent stake in it followed by retail investors with 40.14 percent, foreign institutions with 9.49 percent and mutual funds with 2.11 percent.
Written By Simran Bafna
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