Multibagger small-cap engineering stock below Rs 60, likely to announce bonus; its order book stands at Rs 1,440 crore!

This marks the third significant corporate action for the company, following bonus announcements in 2021 and a stock split in 2022

In the recent trading session, the Nifty index exhibited a subtle yet discernible bearish signal, characterized by the formation of a small-bodied candlestick with upper and lower shadows on the daily chart. The price action remained confined within the high and low of the preceding trading session, resulting in the creation of an inside bar. Additionally, the daily trading range recorded its lowest value in the last four sessions, thus forming an NR4 (Narrow Range 4) pattern coupled with an inside bar, denoted as NR4+IB.

Amidst this market backdrop, one particular stock notably captured attention by registering an 11 per cent surge on Monday, reaching an intra-day high of Rs 58.05 on the NSE, and ultimately settling at Rs 57.55. This noteworthy performer is Salasar Techno Engineering Ltd (STEL).

STEL distinguishes itself as a provider of customized steel fabrication and infrastructure solutions in India, offering comprehensive services encompassing engineering, design, fabrication, galvanization, and deployment. The company's diverse product portfolio spans telecommunication towers, power transmission line towers, smart lighting poles, utility poles, high mast poles, stadium lighting poles, monopoles, substation structures, solar module mounting structures, railway electrification (OHE), Road & Railway Over-Bridges (ROB), and custom galvanized & non-galvanized steel structures.

Furthermore, STEL's expertise extends to delivering end-to-end Engineering, Procurement & Control (EPC) solutions for projects including rural electrification, power transmission lines, and solar power plants. With a current installed capacity of 2,11,000 MTPA, STEL has supplied over 50,000 Telecom Towers, 746 km of Power Transmission Lines, and 629 km of Railway Track to a clientele spanning 25+ countries, totaling more than 600 clients.

Despite being priced under Rs 60, STEL commands a market capitalization of Rs 1,816 crore, classifying it as a Small-Cap stock. Over the past three years, the stock has delivered remarkable multibagger returns, boasting a gain of 151 per cent. Year-to-date, STEL has demonstrated a commendable 11.21 per cent advance.

As of September 30, 2023, the company boasts an impressive order book standing at Rs 1,440 crore, complemented by a robust and diversified client base. Notable clients include major players in the Telecom sector such as Airtel, Power Sector entities like Adani, KEC, Tata Projects, BHEL, L&T, and Power Grid, among others. Additionally, STEL caters to various EPC projects, including collaborations with Indian Railways.

Intriguingly, a pivotal development is on the horizon for STEL shareholders. The Board of Directors is slated to convene on Wednesday, December 20, 2023, to deliberate and potentially recommend the declaration of bonus Shares, subject to requisite approvals. This marks the third significant corporate action for the company, following bonus announcements in 2021 and a stock split in 2022. Consequently, investors are advised to monitor this stock closely as it enters a potentially pivotal phase in its corporate trajectory.

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