175 per cent from its 52-week low of Rs 77.56: Promoter bought 4,31,230 shares or 0.12 per cent stake; Company into significant move towards growth by raising Rs 543 crore!

The promoter of the company bought 4,31,230 shares or 0.12 per cent stake in the company and increased their total stake in the company to 67.31 per cent as of March 18, 2024.

The Indian stock market fell for a second day due to a confluence of factors: rising tensions in the Middle East following the Israel-Iran war, a strengthening US dollar and Treasury yields, selling by foreign investors, and global market weakness. The Nifty 50 and Sensex indexes both lost over 1 per cent within minutes of opening, with broader market indices like small and Mid-Caps also experiencing significant declines. This selling pressure reflects broader global anxieties as the US dollar reaches a 34-year high against the Japanese Yen and Asian markets also trade lower. Currently, the stock market was trading in red with Sensex and Nifty-50 indices down over 0.6 per cent.

The champion stock today we will be speaking about is Man Infraconstruction Ltd (MICL).

Man Infraconstruction Limited (MICL) is a one-stop shop for civil construction projects across various sectors, including ports, residences, commercial buildings, and roads. They handle engineering, procurement, and construction (EPC) for these projects and have experience developing both residential communities and commercial spaces.

MICL, a real estate and EPC company, is making a significant move towards future growth by raising Rs 543 crore through convertible warrants. This funding will be used to expand their EPC and real estate business, including acquiring new projects, purchasing equipment, and supporting working capital. They boast a successful track record of completing projects early and selling out nearly all inventory before completion. MICL is strengthening its position in the Mumbai market with several upcoming iconic projects, including India's tallest residential tower and a unique gated community. These projects have significant revenue potential, totalling over Rs 12,000 crore. This strategic investment positions MICL for continued dominance in the Mumbai real estate market.

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MICL operates a unique and financially sound business model. They have diversified income streams through both real estate projects and EPC (engineering, procurement and construction) services, with margins ranging from 10 per cent to 20 per cent. Their focus on joint ventures and development management (DM) projects allows them to leverage partner capital, minimizing their investment (currently around Rs 700 crore for a 4.6 million square feet portfolio). This asset-light approach combined with a healthy balance sheet (only Rs 205 crore in borrowings) positions them well for growth. They boast a robust order book of ongoing and upcoming real estate projects (nearly 6 million square feet) and ongoing EPC projects worth Rs 1,047 crore, and they actively pursue new government and commercial projects to further solidify their position.

Despite reducing its debt, the company is expected to deliver another strong quarter, building on its impressive 31.2 per cent compound annual growth rate (CAGR) in profits over the last five years. Additionally, the company maintains a healthy dividend payout of 34.7 per cent and has significantly improved its efficiency by reducing working capital requirements from 303 days to 132 days.

While the industry has an average PE ratio of 37.2x, this company's shares trade at a discount of 25.2x, all while boasting a return on equity (ROE) of 26.4 per cent and a return on capital employed (ROCE) of 32 per cent. The promoter of the company bought 4,31,230 shares or 0.12 per cent stake in the company and increased their total stake in the company to 67.31 per cent as of March 18, 2024. From Rs 77.56 to Rs 213.90 per share, the stock gave multibagger returns of 175 per cent. Investors should keep an eye on this Small-Cap stock.

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