Shares of this multibagger small-cap stock under the ‘Iron & Steel’ sector jumped around 6 percent in Wednesday’s trading session after receiving environmental clearance for a commercial coal mine. In the last month itself, the company’s stock gained more than 40 percent.
With a market capitalization of Rs 2,472.22 crores, the stocks of Prakash Industries Limited opened their trading hour on Wednesday at Rs 135.45 and currently trade at Rs 138.05.
The scrip saw an intra-day high price, also marked as the fresh 52-week high price, of Rs 142.65 exhibiting a gain of around 9 percent as compared to the previous close of Rs 131.
Such bullish movements in the company’s stock price are observed after an update, from the company’s end, pertaining to the ‘Bhaskarpara’ commercial coal mine in Chhattisgarh.
The company informed that the ‘Ministry of Environment, Forest and Climate Change’, Government of India has granted “Environmental Clearance” (EC) for the coal mine mentioned above. Being a commercial one, the company expects a boost in its revenue as well as profitability through the sale of coal in the open market.
During recent quarters, the company maintained its levels of operating revenues which were noted at around Rs 1,010 crores. Moreover, the net profits of the company went up from Rs 57.96 crores during Q4FY22-23 to Rs 89.41 crores during Q1FY23-24.
In addition, the company’s profitability metrics such as the return on equity (RoE), as well as return on capital employed (RoCE), have increased marginally with the former increasing from 5.99 percent during FY21-22 to 6.44 percent during FY22-23, and, the latter moving up slightly from 7.35 percent to 8.12 percent.
Keeping a purview of one year, the company has proven to deliver multibagger returns of around 145 percent, i.e., if someone had invested Rs 1 Lakh in the company’s stock, it would have converted to Rs 2.45 Lakhs within a period of one year.
As per the latest shareholding data available for the June 2023 quarter, the company’s Promoters hold a 44.11 percent stake, and the Foreign Institutional Investors (FIIs) hold a 3.57 percent stake in the company.
Prakash Industries Limited is involved in the business of manufacturing as well as selling iron and steel products including wire rods, sponge iron, TMT bars, ferroalloys, and many others.
Written by Amit Madnani
