4:1 bonus share & Rs 2,388 crore order book: Multibagger penny stock under Rs 20 in focus as company reports positive quarterly results (Q2FY25) & half-yearly results (H1FY25)
The stock gave multibagger retunes of over 100 per cent from its 52-week low of Rs 8.71 and a whopping 1,660 per cent in 5 years.
On Wednesday, shares of Salasar Techno Engineering Limited (STEL) surged 2.60 per cent to an intraday high of Rs 17.94 per share from its previous closing of Rs 17.49 per share. At the closing bell, the company's shares were trading at Rs 17.43 per share, down 0.34 per cent and saw a spurt in volume by more than 1.07 times on BSE.
Established in 2006, Salasar Techno Engineering Limited (STEL) is a leading provider of customized steel infrastructure solutions in India. They offer a comprehensive range of services, including engineering, design, fabrication, galvanization and installation. STEL's product portfolio includes various towers (telecom, power transmission, lighting, etc.), substations, solar structures, railway electrification components, bridges and custom steel structures. Moreover, they act as an EPC contractor, managing complete projects for rural electrification, power lines and solar plants. As of June 30, 2024, STEL has a strong order book of Rs 24,019 million.
According to Quarterly Results (Q2FY25), the revenue increased by 2.2 per cent to Rs 281.49 crore and net profit increased by 6.9 per cent to Rs 9.68 crore compared to Q2FY24 while in its half-yearly results (H1FY25), the net sales increased by 7.1 per cent to Rs 575.49 crore and net profit increased by 5 per cent to Rs 20.17 crore compared to H1FY24.
Management Guidance
- Revenue Growth: The company expect its top line and bottom line to grow at a CAGR of at least 20 per cent for the next few years. This anticipated growth is underpinned by a strong order book in the transmission and distribution sector, alongside our operations in the supply of monopoles and heavy steel structure division.
- Order Book: The project has consistent monthly orders ranging from Rs 30 crore to Rs 35 crore for telecom towers. Looking ahead, the company is optimistic about the future, bolstered by a strong order book worth Rs 2,388 crore. This includes both domestic and international EPC orders, monopoles, projects under our heavy steel structure division, and export orders for telecom towers and poles. It is also actively working to participate in orders within the EPC business, where it see opportunities for improved margins.
- Debt Reduction: Following the long-term debt repayment schedule, it will fulfil our debt obligation. Accordingly, this will significantly reduce our debt and further strengthen our financial position.
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Earlier, STEL's strategic acquisitions, such as EMC Limited, and additional funding from Coeus Global Opportunities Fund, have strengthened its market position. Furthermore, significant project wins, including a Rs 1,033.78 crore contract from Tamil Nadu Generation and Distribution Corporation Limited and a Rs 173.99 crore contract in partnership with Rail Vikas Nigam Ltd for Madhya Pradesh Power Transmission Company Limited, demonstrate STEL's growth trajectory.
The company issued bonus shares in a 4:1 ratio to its shareholders on February 1, 2024 (ex-date). This means that for every one share a shareholder held, they received four additional shares. The stock gave multibagger retunes of over 100 per cent from its 52-week low of Rs 8.71 and a whopping 1,660 per cent in 5 years. Investors should keep an eye on this small-cap stock.
Disclaimer: The article is for informational purposes only and not investment advice.