Under Rs 100 multibagger cable stock rockets over 9 per cent with heavy volume; Strong order book of Rs 555.80 crore & Set to be debt-free in FY25
The stock gave multibagger returns of 665 per cent in just 3 years and a whopping 900 per cent in 5 years.
On Friday, one of the Top Gainers on BSE, shares of Paramount Communications Ltd sparked over 9 per cent to Rs 98.50 per share from its previous closing of Rs 90.10 per share. The stock’s 52-week high of Rs 116.70 and its 52-week low of Rs 51.20. The shares of the company saw a spurt in volume by more than 2 times on BSE.
Paramount Communications Limited plans to expand its authorized share capital from Rs 80 crore to Rs 90 crore by issuing an additional 5 crore equity shares of Rs 2 each. While the number of redeemable preference shares will remain unchanged at 10 lakh, the company seeks shareholder approval at its AGM on September 19, 2024, to raise up to Rs 400 crore through a combination of equity shares, convertible, and non-convertible debentures, subject to regulatory approvals. Importantly, the company has fully settled all outstanding debts to the State Bank of India, which was subsequently acquired by Invent Assets Securitisation & Reconstruction Private Limited. There are no remaining obligations to Invent, as all direct dues have been repaid.
Paramount Communications Ltd produces a variety of wires and cables, including power cables, telecom cables, railway cables, and specialised cables. The company boasts a substantial client base, including esteemed organisations such as Larsen & Toubro, Steel Authority of India (SAIL), BSES, Bharat Heavy Electrical Ltd, Power Grid Corporation, BSNL, Tata Steel, Alcatel Lucent Enterprises, ISRO, Indian Railways, Indian Oil, NTPC, among others.
DSIJ’s 'multibagger Pick’ service recommends well researched multibagger stocks with High Returns potential. If this interests you, do download the service details here.
The company reported strong financial performance for both the first quarter of fiscal year 2025 (Q1FY25) and the full fiscal year 2024 (FY24). In Q1FY25, net sales surged 52.5 per cent to Rs 321.06 crore, operating profit climbed 61.6 per cent to Rs 29.91 crore and profit after tax (PAT) soared 74.1 per cent to Rs 25.30 crore compared to the same period last year. For the entire FY24, net sales grew 32.7 per cent to Rs 1,078.56 crore, profit before tax (PBT) increased 51.5 per cent to Rs 97.26 crore and PAT jumped 79.3 per cent to Rs 85.63 crore compared to FY23.
The company has a robust order book of Rs 555.80 crore and is experiencing strong sales across all product lines, especially power and railway cables. Export sales have remained steady compared to the previous fiscal year. Increased production is driving cost efficiencies and improving profitability. The company maintains a strong financial position with a low debt-to-equity ratio of 0.16 and a healthy current ratio of 3.40. It is on course to become debt-free by the end of the current fiscal year, having fully repaid its Rs 86.25 crore debt.
In June 2024, FIIs bought 3,81,010 shares and increased their stake to 7.10 per cent compared to 6.98 per cent in March 2024. The company's shares have an ROE of 20 per cent and an ROCE of 16 per cent. The stock gave multibagger returns of 665 per cent in just 3 years and a whopping 900 per cent in 5 years. Over a decade, the stock has soared from Rs 3.60 per share to Rs 98.78 per share, achieving multibagger returns of 2,644 per cent. Investors should keep an eye on this cable manufacturing stock.
Disclaimer: The article is for informational purposes only and not investment advice.