Synopsis:
Gallantt Ispat posted a robust Q1FY26 with 50 percent sequential net profit growth and 5.22 percent revenue rise, driving shares up 8.49 percent intraday. Margins improved to 22 percent.
A steel manufacturing stock surged in Tuesday’s session following a strong improvement in quarterly earnings, driven by robust growth in operating profit and net profit. Despite a slight decline in revenue on a year-on-year basis, margin resilience and earnings momentum supported positive sentiment.
The stock in focus is Gallantt Ispat Ltd, with a market capitalization of Rs 17,572 crore. The stock opened at Rs 700 and surged to an intraday high of Rs 738.65, compared to its previous close of Rs 681, marking a sharp rise of 8.49 percent during the session.
What’s the News?
Quarter-on-quarter, the company’s revenue from operations grew from Rs 1,072 crore in Q4FY25 to Rs 1,128 crore in Q1FY26, marking a growth of 5.22 percent. Operating profit rose from Rs 183 crore to Rs 247 crore, a rise of 34.97 percent. Profit before tax increased by 35.85 percent from Rs 159 crore to Rs 216 crore, while net profit jumped by 50 percent from Rs 116 crore to Rs 174 crore. Operating profit Margin stood at 22 percent.
Year-on-year, revenue declined marginally by 2.75 percent from Rs 1,160 crore in Q1FY25 to Rs 1,128 crore in Q1FY26. However, operating profit rose by 14.88 percent from Rs 215 crore to Rs 247 crore, and profit before tax rose 20.67 percent from Rs 179 crore to Rs 216 crore. Net profit increased by 42.62 percent to 174 crore compared to Rs 122 crore in the same quarter last year.
Financial Overview and Valuation
Gallantt Ispat currently trades at a price-to-earnings ratio of 38.8, significantly higher than the industry PE of 23.7, indicating that the stock remains overvalued. The company reported a return on equity of 15.1 percent, return on capital employed at 19.2 percent, and return on assets at 12 percent.
The earnings per share (EPS) as of June 30th stood at Rs 7.20. The shareholding structure remained unchanged during the quarter compared to Q4FY25, reflecting stability in institutional and promoter holdings.
Also read: Smallcap stock hits 5% upper circuit after reporting 505% YoY increase in net profit
Future Outlook
The company is currently expanding its integrated steel plant at Gorakhpur, targeting a production capacity of 5.28 lakh MT annually and setting up a new cement plant of 3.96 lakh MT. Additionally, it aims to boost captive power production to 78 MW, install a pellet plant with 8 lakh MT capacity, and invest Rs 200 crore in a real estate project featuring a hotel, mall, multiplex, and housing complex near Gorakhnath Temple in Gorakhpur.
About the Company
Gallantt Ispat Ltd., founded in 2005 by first-generation entrepreneur Mr. Chandra Prakash Agrawal, is a prominent integrated steel manufacturer in India. The company specializes in producing a wide range of quality iron and steel products, including sponge iron, billets, and TMT bars.
Written by -Manan Gangwar
Disclaimer
The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Trade Brains Technologies Private Limited or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
