Shares of this smallcap company clocked 20 percent upper circuit in Monday’s trading session after the board announced bonus shares in the ratio of 3:1. In just five trading sessions, the shares have delivered around 45 percent returns to its shareholders.
Price Movement:
With a market capitalization of Rs. 2,025 crores, the shares of GRP Ltd started Monday’s trading session on a higher note at Rs. 13,650.05 compared to its previous close of Rs. 12,869.20. During the trading session, the shares clocked a 20 percent upper circuit at Rs. 15,443 apiece, also recorded as the company’s fresh 52-week high.
What Happened:
Such a bullish movement in the share price was observed after the company in an exchange filing announced that the Board of Directors at their meeting held on Saturday, 29th June 2024 had considered and approved the issue of bonus shares by way of capitalization of general reserves, to the equity shareholders of the company in the ratio of 3:1.
Each eligible shareholder holding one existing fully paid-up Equity Share valued at Rs. 10 each as of the record date will receive three new fully paid-up Equity Shares, also valued at Rs. 10 each. This will be the first time that GRP will be issuing bonus shares to shareholders.
Financials:
Looking at the company’s financial statements, the revenue zoomed by 25 percent from Rs. 110 crores during the December quarter to Rs. 138 crores in the March quarter. In addition, the net profits magnified by 200 percent from Rs. 4 crores to Rs. 12 crores during the same period.
Important Financial Ratios:
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 9.46 percent during FY 22-23 to 13.57 per cent in FY 23-24, and, the return on capital employed (RoCE) zoomed from 11.70 percent to 19.45 percent during the same timeframe.
Future Outlook:
The company is preparing for a capacity expansion in crumb rubber, with a projected project cost ranging from 35 to 40 crores. Additionally, it is exploring opportunities within various recycling sectors governed by Extended Producer Responsibility (EPR), and is continuously working towards enhancing operational efficiency while exploring new business prospects.
Client base:
The company has more than 400 customers and has an export presence in more than 60 countries. It supplies its product to 7 out of the top 10 global tyre companies. Some of them are CEAT, Apollo, Birla Tyres, Bridgestone, MRF, Pirelli, Yokohama, and Goodyear, amongst others.
Company Profile:
Headquartered in Mumbai, GRP Ltd, is a leading manufacturer of reclaimed rubber from used tyres, upscaled polyamide from nylon waste, and engineered products die-cut from end-of-life tyres.
Written By Vaibhav Patil
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