The shares of this smallcap company jumped upto 2 percent in Friday’s trading session after announcing the acquisition of Jindal Rail Infrastructure for Rs. 615 crores. The stock has delivered a multi-bagger return of 188 percent return to its shareholders in one year.
Price Movement:
With a market capitalization of Rs. 10,981 crores, the shares of Texmaco Rail & Engineering Ltd started Friday’s trading session on a higher note at Rs. 290.50 compared to its previous close of Rs. 276.11. During the trading session, the shares hit a high of Rs. 292, gaining around 2 percent and are currently trading at Rs. 275 apiece.
What Happened:
The company announced that it had acquired a 100 per cent shareholding in Jindal Rail Infrastructure Limited for a consideration of around Rs 615 crores.
Jindal Rail Infrastructure is involved in the manufacturing of rail wagons and designing, engineering, and providing project execution services related to wagons.
According to the exchange filing, the company entered into definitive agreements with Jindal Rail & Infrastructure Limited, JITF Urban Infrastructure Services Limited, and Siddeshwari Tradex Private Limited for the acquisition of 100 percent of the share capital of JRIL on a fully diluted basis.
As per the company’s statement, the acquisition marks the largest in the history of India’s rolling stock industry and will greatly enhance Texmaco’s manufacturing capacity, positioning it as the leading producer of wagons in India.
This acquisition will help Texmaco to foray into new types of wagon production by leveraging JRIL’s expertise in designing freight cars like BFNV wagons for steel and ACT1 wagons for automobile carriage.
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Further, the combined capabilities will create a synergistic effect, allowing Texmaco to expand its product offerings and cater to a wider range of industries.
Moreover, Texmaco plans to leverage JRIL’s facilities to vertically integrate operations and enhance its competitive advantage. This will enable Texmaco to optimize costs, improve quality and deliver better value to customers worldwide.
Overall, By combining its existing strengths with JRIL’s capabilities, Texmaco is poised to expand its footprint across domestic and international markets.
Financials:
Looking at the Texmaco Rail & Engineering financials, the revenue zoomed by 27 percent from Rs. 896 crores during the December quarter to Rs. 1,145 crores in the March quarter. In addition, the net profits surged by 50 percent from Rs. 30 crores to RS. 45 crores during the same period.
Order Book:
As of March 2024, the company’s order book stood at Rs. 7,900 crores. Of this total, 63 percent were for Freight Cars, 14 percent were from Infra – Electrical and the remainder was distributed among Infra – Rail & Green Energy, Steel Foundry, and Component orders.
Important Financial Ratios:
In terms of key financial metrics, the company reported a return on equity of 4.46 percent and a return on capital employed of 10.33 percent for the period spanning FY23-24. Additionally, the net profit margin stood at 2.74 percent during the same timeframe.
Company Profile:
Texmaco Rail & Engineering Ltd is an engineering infrastructure co. & part of the Adventz Group, The co. is involved in the business of manufacturing Rolling stock, hydro-mechanical equipment, steel castings & construction of Rail EPC, bridges, and other steel structures.
Written By Vaibhav Patil
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