Low PE high ROE stock at Rs 117 per share; Board likely to announce bonus shares and expands business with G S Caltex

The stock is up by 15 per cent from its 52-week low of Rs 110.90 per share and down by 24.5 per cent from its 52-week high of Rs 155 per share.

Sunrise Efficient Marketing Ltd informed that a Meeting of the Board of Directors of the Company is scheduled to be held on Tuesday, 27th February 2024, inter alia, to transact following major businesses:

1. To consider and approve the increase in the authorised capital of the company.
2. To discuss, consider and approve the issue of bonus shares to the equity shareholders of the company subject to the approval of members.
3. To consider and decide book closure date and cut-off date for voting purpose and bonus issue.
4. To consider any other matter with the permission of the Chair.

Additionally, SEML has established itself as a powerhouse in the Indian Industrial Oil & Lubricants market, achieving the No. 2 position within just 6-7 years. Now, they're setting their sights on the booming Automotive Oil Segment. Recognizing the potential of India's massive and growing auto market, they've brought on board a seasoned executive with 25 years of local experience.

Their mission: strategically distribute GS Caltex products to 1,000 retailers and 500 workshops. GS Caltex, a collaboration between South Korean giant GS Energy and Chevron Corporation, boasts being the world's 2nd largest base oil refinery, supplying over 100 countries.

Here's why SEML is confident:

• Competitive Edge: GS Caltex offers unique value with Group 2+ base oil in even their entry-level products, surpassing competitor offerings. This, coupled with competitive pricing, positions them strongly.
• Network Expansion: As SEML builds its network, it anticipates attracting other global automotive companies seeking distributorship for genuine parts and products in Surat and surrounding areas. This will further fuel their growth in the automotive sector.
• OEM Partnerships: Major automotive names like Hyundai, Kia, and Volvo already trust GS Caltex, highlighting the quality and performance of their products.

The Future Looks Bright: Leveraging its expertise and strategic alliances, SEML aims to carve a significant space in the Indian Automotive Oil Segment. Their success in this venture will not only contribute to their overall growth but also position them as a trusted partner for global automotive companies in the region.

Sunrise Efficient Marketing Ltd (BSE: 543515) is a leader in the distribution business of automation, drives, gearboxes, motors, pumps, oils & FMCG products, etc. SEML has a market cap of Rs 114 crore. The net sales increased by 37.81 per cent to Rs 49.64 crore and net profit increased by 140 per cent to Rs 3.38 crore in H2FY23 over H2FY22. The net sales increased by 50.66 per cent to Rs 96.83 crore and net profit increased by 63.60 per cent to Rs 8 crore in FY23 over FY22.

The company has strategically added new feathers to its cap in terms of expanding infrastructure, the addition of new business lines and collaborating with different industry leaders. The objective is to provide high-quality and energy-efficient products and automation solutions using the latest technology to its customers.

Today, shares of Sunrise Efficient Marketing surged 8.53 per cent to Rs 117 per share from its previous closing of Rs 107.8. The stock has a PE of 11.4x, an ROE of 40.6 per cent and an ROCE of 39.1 per cent. The stock is up by 15 per cent from its 52-week low of Rs 110.90 per share and down by 24.5 per cent from its 52-week high of Rs 155 per share. Investors should keep this micro-cap stock under the radar.

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

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