The shares of this penny stock gained up to 4 percent after the company bagged significant five work orders from different Domestic Entities for Rs 3.55 crore.
With a market capitalization of Rs 89.90 crore, the shares of Newmalayalam Steel Limited were trading at Rs 52 per share, decreasing around 3.35 percent as compared to the previous closing price of Rs 54 apiece.
Reason for rise
According to the company filing, Newmalayalam Steel Ltd secured five domestic orders to supply 500 MTS of Demac GP Pipes and Tubes to Vinny Steels (Thrissur), JVS Steels (Pavaratty), Mambakkadans Steels (Pattimattom), Indian Steel Center (Pavaratty), and Mariya’s Pipe & Steels (Chingavanam) worth ₹3.55 crore.
Financial Performance
According to its recent filing, in the year ending March 2024, the company’s revenue for FY24 stood at Rs. 300 crore, reflecting a decline of 15.25% from Rs. 354 crore in FY23. Similarly, profit decreased by 33.33%, dropping from Rs. 6 crore in FY23 to Rs. 4 crore in FY24.
The company presents a mixed financial picture. While experiencing a significant decline in sales growth at -20%, the company managed to achieve an impressive compounded profit growth of 190%. The stock price has performed well with a 55% CAGR over the five-year period. However, the return on equity has remained relatively stagnant at just 1%, suggesting potential inefficiencies in converting profits into shareholder value.
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Market Outlook
India’s consumer market is set for strong growth, driven by a 6.5% economic expansion in FY 2024–25, a booming middle class, and rapid urbanization. E-commerce is flourishing, with projected revenues of $200 billion by 2026, fuelled by growing internet penetration.
Rising demand for organic products and branded goods reflects changing consumer preferences. Government initiatives like ‘Make in India’ and ‘Digital India’ further support manufacturing, digital transactions, and organized retail. Companies innovating to meet evolving needs will excel in this dynamic landscape.
Shareholding Pattern
As of the September 2024 shareholding pattern, Newmalayalam Steel Limited is primarily held by the promoters at 19.43 percent, foreign institutional investors hold 0.11 percent, and the public at 80.47 percent.
Company profile
Newmalayalam Steel Limited, established in 2017 in Thrissur, Kerala, produces high-quality galvanized pipes, tubes, and sheets for Kerala’s construction industry. Led by Managing Director Varghese Davis, the company plans to expand through technological upgrades and solar power diversification.
Written by Abhishek Singh
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