1:1 bonus share and promoter & FIIs increase stake: This debt-free steel tube manufacturer broadens operations through strategic acquisition of Nabha Steels and Metals

The stock gave multibagger returns of 325 per cent in 3 years and a whopping 1,470 per cent in 5 years.

JTL Industries Ltd, a manufacturer of steel tubes, has taken a major step to expand its operations by acquiring a controlling stake in Nabha Steels and Metals. Here's a breakdown of the key details:

• Acquisition: JTL Industries acquired a 67 per cent stake in Nabha Steels and Metals, a steel product manufacturer based in Mandi Gobindgarh, Punjab.
• Nabha Steels and Metals: This company has a manufacturing capacity of 2,00,000 tonnes and produces steel products like coils and billets. Notably, their revenue has grown significantly, jumping from around Rs 113 crore in FY23 to Rs 225 crore in FY24.
• Impact on JTL: This acquisition significantly boosts JTL's backward integration capacity. Backward integration refers to a company acquiring control of its suppliers. In this case, JTL will increase its coil production capacity from 1,50,000 tonnes (previously from their Raipur plant alone) to a total of 2,50,000 tonnes. Additionally, they'll gain a capacity of 1,00,000 tonnes for long products. JTL's backward integration will now be spread across Chhattisgarh and Punjab.
• Financials of the deal: JTL paid Rs 70 crore to acquire this 67% stake. The acquisition is expected to be completed within a month.

Overall, this acquisition seems to be a strategic move by JTL Industries to strengthen its position in the steel product manufacturing sector. It will allow them to produce more steel internally, potentially reducing reliance on external suppliers and giving them more control over their production process.

Earlier, the company's promoter, Mr Pranav Singla bought 3,00,000 shares or 0.17 per cent via open market as per disclosure available on the exchange. His stake increased from 1.07 per cent to 1.24 per cent. Additionally, in February 2024, FIIs bought 68,63,325 shares and increased their stake to 4.62 per cent compared to 1.62 per cent in December 2023.

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JTL Industries Ltd, a leading manufacturer in India, supplies steel tubes, pipes, and related products. Their offerings include ERW pipes, galvanized pipes, and even solar structures. Operating across various industries like infrastructure and energy, JTL boasts a wide client base including Tata Power, Ashok Leyland, and Siemens. With a current capacity of nearly 5,90,000 MTPA and plans to expand to 1 million MTPA by 2025, they are continuously focusing on increasing the production of value-added products.

According to Quarterly Results, the net sales increased by 65.26 per cent to Rs 567.35 crore and net profit increased by 47.24 per cent to Rs 30.18 crore in Q3FY24 compared to Q3FY23. According to the nine-month results (9MFY24), the net sales increased by 46.1 per cent to Rs 1,574.3 crore and net profit increased by 56.1 per cent to Rs 83.5 crore in 9M FY24 compared to 9M FY23. The net sales increased by 15 per cent to Rs 1,547 crore and net profit increased by 48 per cent to Rs 90 crore in FY23 compared to FY22.

On September 07, 2023, the shares of the company ex-traded bonus share in the ratio 1:1 and earlier to it i.e., on August 04, 2021, the shares of the company ex-traded stock split of equity shares from a face value of Rs 10 to a face value of Rs 2 each. Today, the shares of JTL Industries Ltd gained 2.03 per cent to an intraday high of Rs 220.65 per share from its previous closing of Rs 201.75. The stock’s 52-week high is Rs 276.60 per share and its 52-week low is Rs 150.25. The stock gave multibagger returns of 325 per cent in 3 years and a whopping 1,470 per cent in 5 years.

Disclaimer: The article is for informational purposes only and not investment advice.