Shares of this penny stock gained 6 percent after the company announced release of Promoter’s pledged shares. In the last five trading sessions, the company’s stock has gained approximately 10 percent.
With a market capitalization of Rs 200 crores, the stocks of Scan Steels Limited are currently trading at Rs 40. The scrip witnessed an intra-day high of Rs 41.50, a gain of around 6.30 percent compared to the previous closing levels of Rs 39.01 apiece. The stock is trading near its 52-week high level of Rs 44.
The surge in the share prices was mainly caused due to a recent disclosure submitted by the company via a regulatory filing with the Bombay Stock Exchange (BSE). The filing mentioned the release of 32,96,561 shares of Mr. Rajesh Gadodia who is the Promoter of Scan Steels Limited.
In 2018, the shares were pledged by the State Bank of India during the restructuring process as the company’s account turned into a non-performing asset (NPA).
According to the company’s latest financial data for the past couple of quarters, opposing movements have been observed as far as the operating revenues and net profits are concerned.
The operating revenues, on one hand, reduced from Rs 298 crores during Q3FY22-23 to Rs 274 crores in Q4FY22-23, and, the net profits, on the other hand, showed an up movement from Rs 1 crore to Rs 2 crores.
The company’s ratios, in the past couple of years, have displayed a fall with the basic ones such as the return on equity (RoE) decreasing from 14.47 percent during FY21-22 to 4.18 percent in FY22-23, and, the return on capital employed (RoCE) dipping from 17.06 percent to 9.37 percent.
Scan Steels Limited is a company based in India engaged in the process of manufacturing steel. Some of its offerings include sponge iron, thermomechanical treatment (TMT) rods, generating power, and trading sales-steel products.
Investments in penny stocks are subject to risks due to their illiquid nature. Thus, it is advised to carefully analyse the stock before taking an entry into the same.
Written by Amit Madnani
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