Low PE stock: This small-cap multibagger with m-cap of Rs 1500 crore; receives order of Rs 699 crore!
These orders, spanning diverse sectors, underscore the company's proficiency in delivering tailored engineering solutions.
In a momentous development, this company renowned for its value-added engineering solutions, recently secured orders totalling an astounding Rs 669 crore, equivalent to nearly 50 per cent of its present market capitalization of Rs 1500 crores. These orders, spanning diverse sectors, underscore the company's proficiency in delivering tailored engineering solutions.
Across various verticals, the clientele includes notable names such as:
| Vertical |
Customers |
| PEB |
RLR Infra, SNJ Distilleries, Antariksh Group, Taiin Infra, Power Mech Projects, SR Enterprises, TVS Sangli and MSR Assets. |
| Ascent Buildings, USA |
Red Hot Buildings, Tarheel Buildings, Joiner Construction, T&D Concrete, Tifton Buildings, Dunn Buildings, PS West Construction and JA Street. |
| ICD |
Ashok Leyland, Yamaha, Emerson, Endurance, Haldex, Wabco, Tecumseh, SI Airspring, Kone, Fujitech, Schwing Stetter, INEL, Hydraulics, Elkhart, Kone, Sicor, Venus, Fleetguard, and Jost. |
| Railways |
SAIL Rites, ICF, Titagarh,Texmaco, Wabtech and Oriental |
| Tubes |
ALF Engg, GI Auto, Patton Intl, Toyota Boshoku, Oriental Electrical, Nu-way Hea Transfer, AE Engineering, Fine Components, Hi Esteem, Sigma Electric, Rajsriya, Mohan Industry, Steel Tubes Investments, Scot Industries and Marimba Auto. |
| Steel |
Saint Gobain, Waree, Thermax, VECV, IFB Industries, L G Balakrishnan, Johnson Lifts, Bimetal Bearings, Navayuga Engg, VRL, Primex Plastics and JM Frictech.
|
The name of this company is Pennar Industries Ltd
Financially, Q2FY2024 saw a marginal 2 per cent dip in sales, totalling Rs 814 crore compared to Rs 834 crore in September 2022. However, the company reported a substantial 52 per cent increase in EBIDT, surging from Rs 46.2 crore to Rs 70.2 crore year-on-year. The net profit also witnessed a significant upswing, rising by 37 per cent to Rs 22.4 crore from Rs 16.4 crore in the corresponding period last year.
Conference call analysis reveal that despite flat or slightly lower revenue,
- Pennar Industries anticipates growth in the current financial year by prioritizing higher-margin revenue streams.
- The strategic focus on replacing low-margin revenue with more profitable products and services demonstrates the company's shrewd business approach.
- The Q2FY24 PBT margin stands at 3.65 per cent, with a cash PAT margin of 4.78 per cent, showcasing the company's commitment to profitability.
- Key growth drivers for Pennar Industries include pre-engineered buildings, its U.S. subsidiary PGI, hydraulics, large-diameter tubing, and engineering services.
- With plans to enhance production capacity in the U.S., the company aims to achieve a net profit margin of 5 per cent and an EBITDA margin of 10 per cent, aligning with its strategic financial targets.
In terms of stock performance, as of November 16, 2023, the stock closed at Rs 114.15, marking a gain of more than 10 percent indicating substantial buying interest following the press release. Over longer periods, the stock has demonstrated impressive returns of 73.61 per cent and 552.29 per cent over the past 1-year and 3-year periods, respectively, establishing itself as a multibagger for investors and highlighting considerable long-term investment potential.
Disclaimer: The article is for informational purposes only and not investment advice.
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