900 per cent returns & FIIs increase stake: This multibagger small-cap company bets on future growth with an aim of Rs 2,500 crore sales (3x FY23 sales)!

To fuel its growth strategy, the company is raising Rs 125 crore through a preferential allotment.

On Tuesday, shares of Rushil Décor Ltd plunged 1.33 per cent to Rs 342.30 per share with an intraday high of Rs 349.65 and an intraday low of Rs 323. The stock’s 52-week high is Rs 429.17 and its 52-week low is Rs 202.37. The company falls under the BSE Small-Cap Index and has a market cap of over Rs 900 crore. In the September quarter, FIIs have increased their stake from 0.92 per cent to 0.95 per cent.

The company's capital expenditures have increased from Rs 60 crore for a production capacity of 1.2 million sheets to Rs 90 crore for an expanded capacity of 2.5 to 3 million sheets. With this expansion, the company anticipates achieving a profit margin of 12-15 per cent and generating revenue of Rs 160-180 crore by fiscal year 2026.

With a strong conviction in the laminates market's future growth, Rushil Décor Ltd., under the leadership of Chairman Mr. Krupeshbhai G. Thakkar, has established an ambitious sales target of Rs 2,500 crore (i.e., 3x FY23 sales which is above Rs 800 crore). This target reflects the company's aspiration to become a major player in the industry, capturing a significant share of the Rs 9,000 crore market, which includes both domestic and export segments.

Futhermore, to fuel its growth strategy, the company is raising Rs 125 crore through a preferential allotment, with Rs 90 crore earmarked for greenfield laminates capacity expansion and working capital requirements, Rs 10 crore for MDF plant civil work, and the remaining Rs 15 crore for corporate purposes. The company will issue warrants Issue of up to 42,00,000 warrants convertible into equity shares of face value of Rs 10 each for Rs 297 (including a premium of Rs 287) per warrant.

The company launched an AI-generated TV ad for VIR MDF, a better alternative to plywood and other wood-based panels. The ad introduces a mascot who personifies the strength and durability of VIR MDF and encourages people to use it for durable and stylish furniture, shelves, doors, cabinets, and other applications.

According to the Quarterly Results, the net sales increased by 0.6 per cent to Rs 204.61 crore and net profit decreased by 60.45 per cent to Rs 10.55 crore in Q2FY24 compared to Q2FY23. According to the half-yearly results, the net sales decreased by 4 per cent to Rs 397.43 crore and net profit decreased by 58 per cent to Rs 22.75 crore in H1FY24 compared to H1FY23.

Rushil Decor Ltd is primarily engaged in manufacturing and sale of laminate sheets, medium density fibre board, prelaminated medium density fibre board boards, polyvinyl chloride (PVC) board and particle board.

The stock gave multibagger returns of 325 per cent in 3 years and a whopping 900 per cent in a decade. Investors should keep an eye on this stock.

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