Debt-free multibagger iron & steel stock at Rs 60.49 saw heavy buying today: Scrip gains over 1,800 per cent from its 52-week low of Rs 3.15

From Rs 3.15 (52-week low) to Rs 60.49 per share, the stock gave multibagger returns of over 1,800 per cent in just 1 year.

Established in 1971, Rathi Steel and Power Ltd, a Delhi-based steel manufacturer, offers Rebars and Wire Rods under the "RATHI" brand across 1,000 retail outlets and also supplies stainless steel products to major producers of downstream goods like Bright Bars and fasteners. Their clientele boasts esteemed names like the Airports Authority of India, Delhi Metro Rail, and NTPC. The company has a market cap of Rs 479 crore.

Rathi Steel Company has undergone a significant turnaround in FY24. The company faced challenges in recent years due to factors like cheap imports from China, issues with raw materials due to mining restrictions, and a tough macroeconomic climate impacting their Odisha plant. However, through a successful restructuring plan, Rathi achieved a debt-free position by March 2024.

To support this growth and improve operational performance, Rathi took several key steps. They raised funds through preferential allotment and from Kotak Mahindra Bank. These funds were used to repay expensive debt, expand operations, and modernize projects. Strategically, Rathi shifted its focus towards high-margin value-added stainless steel products. They used internal funds to enhance production capacity for these products at their Ghaziabad plant. Additionally, they implemented cost-cutting initiatives and optimized their product mix to increase the share of valuable products.

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According to Quarterly Results, the net sales increased by 17 per cent to Rs 118.35 crore and net profit increased by 2,457 per cent to Rs 20.20 crore in Q4FY24 compared to Q3FY24. In its annual results, the company reported net sales of Rs 492.83 crore and a net profit of Rs 23.61 crore in FY24 while in FY23, the company reported net sales of Rs 726.55 crore and a net profit of Rs 87.47 crore.

Today, shares of Rathi Steel and Power Ltd surged 9.96 per cent to Rs 60.49 per share from its previous closing of Rs 55.01 with an intraday high of Rs 60.49 and an intraday low of Rs 56. The stock’s 52-week high is Rs 67.51 while its 52-week low is Rs 3.15. The shares of the company saw a spurt in volume by more than 1.01 times.

The promoters of the company own a 40.32 per cent stake, DIIs own 2.53 per cent and the public owns a 57.15 per cent stake as of March 2024. From Rs 3.15 (52-week low) to Rs 60.49 per share, the stock gave multibagger returns of over 1,800 per cent in just 1 year. Investors should keep an eye on this micro-cap stock.

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