This penny stock gained 66 per cent since the beginning of September; do you hold it?

Shares of the company are up by 5 per cent from the previous closing of Rs 13.11.

Shares of SAL Steel Ltd opened at Rs 13.40 up by 5 per cent from the previous closing of Rs 13.11. On BSE the stock touched the upper circuit at Rs 13.76 AND saw a spurt in volume by more than 1.37 times. 

SAL Steel is engaged in the manufacturing of Sponge Iron and Ferro Alloy used in the iron and steel industry. The company also has a power generation capacity of 40 MW. The product range of the company consists of Direct Reduced Iron (DRI/Sponge Iron), Ferro Alloys, Iron Ore pellets and various finished steel products. The company majorly sells its products in India. 

A single customer contributed 50 per cent to total revenues in FY21. The promoters of the company have pledged 100 per cent of their holding in the company. The company has contingent liabilities worth about Rs 55 crores related to various disputes regarding taxes and the market cap of the company is Rs 116.91 crore.

Sales for sponge iron during FY21 were 87,377 MT as compared to 1,28,270 MT in the previous year. Sales of Ferro Chrome during FY21 were 11,280 MT as compared to 18,000 MT in the previous year. 

The stock PE is 14.24. The ROE and ROCE of the stock are 36.1 per cent and 9.83 per cent. As of FY22 companies’ borrowings were greater than the share capital of the company. Companies borrowing stood at Rs 124 crore whereas the share capital of the company was Rs 85 crore. In Q1FY23 SAL Steel generated sales of Rs 118.70 crore out of which the operating profit was just Rs 2.65 crore. The TTM sales of the company is Rs 536 crore.