Shares of a small-cap multibagger stock hit the 5 percent upper circuit after ace investor Vijay Kedia increased his stake in the company. Its shares were locked at ₹ 39.20 apiece on Tuesday’s intraday trades.
Vijay Kedia has invested in the shares of Patel Engineering through his company Kedia Securities Private Limited. It holds 1,30,00,000 shares in the company or a 1.68 percent stake as of the June quarter (Q1FY24). In the previous quarter, it held 1,00,00,000 shares or a 1.29 percent stake in the company, indicating that it has increased its stake in the latest quarter.
Patel Engineering is engaged in the construction of dams, bridges, tunnels, roads, piling works, industrial structures and other kinds of heavy civil engineering works in areas like hydro, irrigation & water supply, urban infrastructure and transport.
In the past year, the company’s share price increased by 101 percent to deliver multibagger returns. Thus, if an investor had invested ₹ 1 lakh in its shares a year ago, the value of their holdings would have been ₹ 2.01 lakhs today!
With a market capitalization of ₹2,751 crores, Patel Engineering is a small-cap company. It has a low return on equity of 6.96 percent but an ideal debt-to-equity ratio of 0.61. Its shares were trading at a price-to-earnings ratio (P/E) of 13.00, which is significantly higher than the industry P/E of 8.30, indicating that the stock might be overvalued as compared to its peers.
Retail investors hold a 49.29 percent stake in the company, followed by promoters with 39.41 percent. domestic institutions with 9.20 percent and foreign institutions with 2.10 percent.
Written by Simran Bafna
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