Shares of this microcap company surged 7 percent in Monday’s trading session after receiving an order worth Rs. 24.45 crores. The shares were listed on February 5, 2024, on the National Stock Exchange (NSE) SME platform at Rs 220 per share, which represented a premium of 108.3 percent over the issue price of Rs 108 per share.
With a market capitalization of Rs. 656 crores, the shares of Megatherm Induction Ltd started Monday’s trading session on a higher note at Rs. 359 compared to its previous close of Rs. 328.40. During the trading session, the shares hit a high of Rs. 373.95, gaining around 7 percent, also recorded as the company’s all-time high and currently trading at Rs. 351 apiece.
Such a bullish movement in the share price was observed after the company in an exchange filing announced that it had received a bulk order from Rungta Mines Ltd for supplying, erection and commission of capital goods worth Rs. 24. 45 crores and the order is to be executed by six months.
Coming onto the company’s financial statements, the revenue zoomed by 41 percent from Rs. 188 crores during FY21-22 to Rs. 266 crores in FY22-23. In addition, the net profits magnified by 1,300 percent from Rs. 1 crore to Rs. 14 crores during the same period.
The funds raised by the company from its initial public offering (IPO) are to be used to finance the construction of a factory shed, install additional plant and machinery, and cover working capital requirements and general corporate purposes. Furthermore, the company expects to grow its export markets, particularly in South America, Africa, Southeast Asia, the Gulf region, and Europe.
Additionally, Megatherm Induction Limited aims to strengthen its position in the domestic market by providing innovative and high-quality induction heating and melting products, along with turnkey solutions for steel plants.
Due to increasing operating revenue and profits on a YoY basis, the profitability metrics of the company improved with the return on equity (RoE) increasing from 3 percent during FY 21-22 to 27.66 percent in FY 22-23, and, the return on capital employed (RoCE) zoomed from 13.20 percent to 37.31 percent during the same timeframe. Furthermore, the net profit margin increased from 0.58 percent during FY21-22 to 5.26 percent during FY22-23.
Headquartered in Kolkata, Megatherm Induction was incorporated in 2010. The company is engaged in the manufacturing of metal heating and melting equipment, including induction melting and heating equipment, transformers, and turnkey solutions for steel plants.
Written By Vaibhav Patil
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