Back-to-back upper circuit: Cash-rich Low PE multibagger SME stock locked at upper circuit!

With a modest PE of 11.59x and strong reserves, this stock was undoubtedly one to watch closely.

In the ever-buzzing world of Indian benchmark indices, where the Nifty and Sensex were soaring, there was a remarkable spectacle unfolding. The Nifty 50 index, often the stage for market action, had 44 of its stocks painted in vibrant green, while only a mere six dared to appear in red. The market's heartbeat was pounding with anticipation.

Beyond the spotlight, the broader markets were flexing their muscles, outperforming the frontline heroes. The Nifty Mid-Cap was on a joyous journey, trading up by a robust 1.21 per cent, and the Small-Cap, not to be left behind, surged by 1.03 per cent. It was a festival of green candles, as more than 1500 stocks danced in harmony in the lush green zone, while just 500 chose the path of crimson.

In this thrilling scenario, one stock stepped into the limelight with an undeniable presence – Emkay Taps and Cutting Tools Ltd (ETCTL). This stock was no ordinary player; it was locked in an upper circuit, a feat few could achieve, and it was not content with that alone. It reached a breathtaking new 52-week high of Rs 605.40, making investors' hearts race faster.

ETCTL has a story, one that began in 1976 as the brainchild of Mr. Ajay Prakash Kanoria, a first-generation entrepreneur hailing from Nagpur. What started as a proprietorship firm went on to become a private limited company in 1995, and in 2015, it proudly wore the badge of a public limited company. Its name shone on the NSE-Emerge platform, and its expertise lay in manufacturing high-speed steel (HSS) threading taps and cutting tools, primarily catering to the automobile and auto ancillary industries. And that's not all – it also ventured into the world of renewable energy, owning and operating windmills in Rajasthan and Karnataka.

But the star-studded journey didn't stop there. ETCTL had a string of upper circuits to its name, hitting three in a row. In the past year, it had doubled investors' money, earning itself the coveted title of a "multibagger." With exceptional half-yearly performance figures that saw sales surge to Rs 49 crore, net profit jump to Rs 31 crore, and EPS proudly standing at Rs 28.93, this was a stock that couldn't be ignored.

The company had received the coveted No Objection Certificate for a demerger from NSE. The demerger was about transferring the manufacturing of threading taps and cutting tools division to Emkay Tools Limited (ETL, the Resulting Company) in a generous 1:1 ratio.

With a modest PE of 11.59x and strong reserves, this stock was undoubtedly one to watch closely. As the market's eyes were fixated on its journey, the world of finance held its breath, eager to see what this rising star had in store for its investors.

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