Synopsis:
Fast-growing small-cap steel manufacturing company Steel Exchange India Ltd, saw a 1.8% increase in stock price following Rashtriya Ispat Nigam Ltd’s work order worth Rs. 210 crores.
The shares of this small-cap company engaged in the business of manufacturing steel products and providing allied services are in focus as a result of a new order from Rashtriya Ispat Nigam Limited (RINL).
With the market capitalization of Rs. 1,325 crores, the shares of Steel Exchange India Ltd were trading at Rs. 10.8, up 1.8 percent from its previous day’s close price of Rs. 10.61 per equity share.
Work Order
Steel Exchange India Ltd has received a contract from Rashtriya Ispat Nigam Limited (RINL) to convert 1.20 lakh tons of billets into various sizes of Vizag Steel TMT bars every year. The contract is for 2 years and can be extended by 1 more year with mutual agreement. The total value of the contract is up to Rs. 210 crore, which means Rs. 70 crore per year if extended for three years.
About the Company & Others
The flagship company of the Vizag Profiles Group, Steel Exchange India Limited (SEIL), is an integrated steel products manufacturer and allied services provider that was founded in 1999. The company has its headquarters close to Visakhapatnam, Andhra Pradesh.
It has a large manufacturing capacity and produces 220,000 TPA of sponge iron, 340,000 TPA of billets and ingots, and 225,000 TPA of TMT rebars under the well-known “SIMHADRI TMT” brand. SEIL’s integrated operations are supported by its 71.64 MW total power generation capacity.
The company runs two major manufacturing units — the Integrated Steel Plant near Visakhapatnam and the SMS & Power Unit at Kothapeta. The Visakhapatnam plant holds the distinction of being the largest private integrated steel facility in the states of Andhra Pradesh and Telangana. Aligned with the Government of India’s Atmanirbhar Bharat vision, SEIL is now strategically diversifying into the production of specialty steels, taking advantage of the incentives offered under the Production Linked Incentive (PLI) scheme.
The company’s revenue for FY2024–2025 increased by 5.34 percent year over year from 1,086 crores to Rs. 1,144 crores. Net profit saw a sharp increase of 136.36 percent, from Rs. 11 crores to Rs. 26 crores.
At the moment, the company’s P/E ratio is 51.1x as compared to its industry P/E 24.3x, and its ROE and ROCE are 3.79 percent and 11.3 percent, respectively. The D/E ratio of the company stands at 0.51.
Written by Akshay Sanghavi
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