Block Deal Alert: Mahindra and Mahindra bought a 17.41 per cent stake in this company; do you have it?

Today, shares of the company are trading up by 12 per cent.

Shares of Swaraj Engines hit a 52-week high at Rs 1945 after the market opened at Rs 1723. In one day, the stock rose 11.48 per cent. On BSE the stock saw a massive volume surge by more than 9.35 times when Mahindra and Mahindra (M&M) agreed to buy a 17.41 per cent stake from Kirloskar Industries for Rs 296 crore. The share price peaked at Rs 1945 after the market opened at Rs 1723. 

Since its founding in 1989, Swaraj Engines has produced high-tech engine components and diesel engines designed exclusively for tractors with capacities ranging from 22 HP to over 65 HP. Kirloskar Oil Engines Ltd and Punjab Tractors Ltd. collaborated to promote the business. It increased its manufacturing capacity to 42,000 engines per year in 1995. 

Earlier Mahindra and Mahindra Limited and Kirloskar Industries Limited (KIL), controlled 34.76 per cent and 17.43 per cent of the company's shares. The FII's ownership of the business is growing as they currently own 1.90 per cent of the company. Out of 8.90 per cent DIIs stake, DSP small cap fund holds a 6.58 per cent stake in the company. 

The company's top line is increasing at a CAGR of 9 per cent over the past three years. The company's TTM sales total Rs 1222 crore. In FY22, the company had a net profit margin of 9.6 per cent and an operating margin of 13.7 per cent. The cost of raw materials expense is 78 per cent of the company's total sales. 

The company has had an excellent quarter. The sequential topline for the first quarter of FY23 climbed by 64 per cent to Rs 398 crore, and on a yearly basis topline increased by 27 per cent in Q1FY23. In Q1FY23, net profit increased sequentially QOQ by 81 per cent. The company has a Rs 103 crore positive CFO. The ROE and ROCE of the company also appeal to investors and are 37 per cent and 49.7 per cent.