Stock Below Rs 15 Trades at a Discount to Book Value: One-Time Settlement Reduces Debt – Is a Big Move Ahead Like PC Jeweller?

The stock captured investors' attention by hitting its upper circuit limit of 20 per cent on Friday, marking a significant surge in trading activity.

On Friday, the NSE benchmark Nifty50 closed the session with a modest gain of 0.05 per cent, finishing above the 24,800 mark. In contrast, the broader markets underperformed, with the Nifty Midcap 100 and Small-Cap 100 indices declining by 0.49 per cent and 0.11 per cent, respectively.

Amidst this broader market underperformance, one penny stock that stood out was Oriental Trimex Ltd. The stock captured investors' attention by hitting its upper circuit limit of 20 per cent on Friday, marking a significant surge in trading activity. The stock recorded its highest single-day volume since listing, with 66.08 lakh shares traded on the NSE—an eightfold increase compared to its 10-day average volume of 8.48 lakh shares. Currently trading near its six-month high, Oriental Trimex Ltd has gained an impressive 54 per cent in 2024. The stock current market price is Rs 14.43, however, its stocks book value stands at Rs 20.8.

The stock of Oriental Trimex Ltd is commanding attention due to several key developments:

Oriental Trimex Ltd, a prominent player in the natural stone processing and trading sector in India, is making headlines with a series of strategic initiatives designed to redefine its operational capabilities, expand its market presence, and bolster its financial health. These initiatives underscore the company's unwavering commitment to innovation, growth, and customer satisfaction.

Revolutionary Stone Processing Technology
Oriental Trimex Ltd is set to revolutionize the stone industry with the introduction of a cutting-edge wire-based gangsaw machine, known as the "Cable Machine for Slab Cutting." This state-of-the-art technology, sourced from China, will be the first of its kind in India and will be operational at the company’s GummidIPOondi plant near Chennai by December 2024. The machine’s diamond-coated cables enable precision cuts, enhancing efficiency by three times compared to traditional methods, while also reducing waste and improving durability.

New Showroom in Greater Noida
To strengthen its market presence, Oriental Trimex Ltd will open a 21,000 sq. ft. showroom in Greater Noida by September 2024. This showroom, strategically located near the upcoming Jewar Airport and Aerocity, will showcase a wide range of marbles and granites. The company also plans to expand with a new showroom in Delhi, supported by a successful Rights Issue.

Securing a Jet Black Granite Quarry in Orissa
Oriental Trimex Ltd has secured a 30-year lease for a Jet Black Granite Quarry in Orissa, covering 12.260 acres. This quarry, valued at approximately Rs 258.77 crores, is expected to significantly boost the company’s revenue and profitability. With Environmental Clearance expected by November 2024, the quarry will be operational soon after, further solidifying the company’s leadership in the stone industry.

Diversified Product Portfolio
Starting December 2024, Oriental Trimex Ltd will diversify its product offerings to include low-cost Indian granites, designed porcelain tiles, nano stones from China, and marble-designed quartz stones. This expanded portfolio aims to cater to a wider customer base, particularly in Tier 2 and Tier 3 cities under the Central Government's 'Smart City' plan.

Significant Debt Reduction Milestone
In a major financial achievement, Oriental Trimex Ltd has reduced its debt by making a payment of Rs  38.25 crores to Edelweiss ARC as part of a One-Time Settlement agreement. With only a nominal interest amount remaining, the company is on the brink of becoming debt-free by September 2024, further enhancing its credibility and strengthening its market position.

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