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Multibagger stock at Rs 26 with Rs 2,326 crore order book: This engineering company forms a JV with RVNL for an order worth Rs 173.99 crore from MPPTCL
Kiran Shroff

Multibagger stock at Rs 26 with Rs 2,326 crore order book: This engineering company forms a JV with RVNL for an order worth Rs 173.99 crore from MPPTCL

The stock gave multibagger returns of 190 per cent in 1 year and a whopping 980 per cent in 5 years.

Today, the Indian stock market was in green, with the BSE Sensex and NSE Nifty indices gaining 0.20 per cent and 0.17 per cent respectively. Though the market was in green, one multibagger penny stock gained 4.31 per cent of Rs 25.50 per share from its previous closing of Rs 24.35 per share. The stock’s 52-week high is Rs 34.08 and its 52-week low is Rs 7.20.

The stock name is SALASAR TECHNO ENGINEERING LTD (STEL).

Established in 2006 as a tower manufacturer, Salasar Techno Engineering Limited has emerged as a fast-growing Steel structure manufacturer & EPC infrastructure company, providing services across telecom, energy and railways sectors. The company has an order book of Rs 2,326 crore as of December 31, 2023, out of which Rs 1,879 crore are domestic EPC orders, Rs 221 are international EPC orders, orders under heavy steel structure division are worth Rs 110.7 crore, Monopoles orders are worth Rs 72.1 crore and exports orders (telecom towers and poles) are worth Rs 43.2 crore.

The company emerges as the lowest bidder (L1) from Madhya Pradesh Power Transmission Company Limited (MPPTCL) for the construction of 132kV and 220kV transmission lines and associated feeder bays on a total turnkey basis in Eastern Madhya Pradesh. The order is a joint venture partnership wherein RVNL's shares in the project is 51 per cent and Salasar Techno Engineering Ltd.’s share is 49 per cent. The order is worth Rs 173,99,04,310 or Rs 173.99 crore (including GST) and will be completed within 18 months. 

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Salasar Techno Engineering Ltd, a company with 16 years of experience in towers and structures, is capitalizing on the rising demand for monopoles in India. These space-saving, efficient supports are gaining traction due to their advantages over traditional towers, and Salasar Techno is a pioneer in designing, testing, and manufacturing them. Their expertise and commitment to quality have led to recent groundbreaking deliveries and a high volume of inquiries from big customers. With orders worth Rs 72 crore already secured and confidence in getting firm orders for Rs 200 crore within the next year, Salasar Techno is well-positioned to be a leader in the Indian monopoly market.

The company plans to raise Rs 806.4 crore by issuing equity shares and convertible warrants to non-promoters and promoters. The Board of Directors also approved a bonus issue of 4 shares for every 1 share held by members on record as of February 1, 2024. This move is expected to inject substantial capital into the company and support its ambitious growth plans. Specific investors like North Star Opportunities Fund, Intuitive Alpha Investment Fund, and Coeus Global Opportunities Fund have been earmarked for significant share allocations.

According to Quarterly Results (Q3FY24), the net sales increased by 26.32 per cent to Rs 304.35 crore and net profit increased by 56.75 per cent to Rs 167.10 crore compared to Q3FY23 while in nine-month results (9MFY24), the net sales increased by 18.43 per cent to Rs 841.10 crore and net profit increased by 40.89 per cent to Rs 35.96 crore compared to 9MFY23. As of December 2023, promoters own 63.07 per cent, FIIs own 8.85 per cent and the public owns 28.08 per cent.

The stock gave multibagger returns of 190 per cent in 1 year and a whopping 980 per cent in 5 years. Investors should keep an eye on this small-cap stock.

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

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