4:1 bonus shares in FY24; Rs 2,460 crore order book & FIIs bought 3.27 per cent stake: Multibagger engineering stock under Rs 21 surges over 4 per cent!

The stock gave multibagger returns of 125 per cent in 1 year and a whopping 960 per cent in 5 years.

On Thursday, shares of Salasar Techno Engineering Limited (STEL) gained 4.84 per cent to an intraday high of Rs 20.13 per share from its previous closing of Rs 19.20 per share. FIIs bought a 3.27 per cent stake in the company in Q4FY24 and increased to 6.27 per cent compared to 3 per cent in Q3FY24.

Salasar Techno Engineering Limited (STEL), established in 2006, acts as a single source for customized steel infrastructure solutions in India. They offer comprehensive engineering, design, fabrication, galvanisation, and installation services. Their product range includes various towers (telecom, power transmission, lighting, etc.), substations, solar structures, railway electrification components, bridges, and custom steel structures. Additionally, STEL acts as an EPC contractor, undertaking complete project management for rural electrification, power lines, and solar plants. The company has an order book of Rs 2,460 crore as of December 31, 2023. 

According to Quarterly Results (Q4FY24), the net sales increased by 24.6 per cent to Rs 367.33 crore and net profit increased by 15.2 per cent to Rs 16.97 crore compared to Q4FY23 while in its annual results (FY24), the net sales increased by 20.3 per cent to Rs 1,208,43 crore and net profit increased by 31.5 per cent to Rs 52.93 crore compared to FY23. As of April 2024, promoters own 58.76 per cent, FIIs own 6.27 per cent and the public owns 34.95 per cent.

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Additionally, the company completed the acquisition of EMC Limited, which was in liquidation. This means STEL takes over EMC in its current state and assumes all risks. The acquisition was finalized through an e-auction for a total price of Rs 178 crore, with STEL recently paying the remaining Rs 168 crore. This move is expected to strengthen STEL's market position in the engineering and infrastructure sector. In a separate development, STEL's Board of Directors approved the conversion of warrants held by Coeus Global Opportunities Fund into equity shares. This conversion brings an investment of Rs 35.1 crore to STEL and increases Coeus' ownership stake in the company to 1.88 per cent.

Earlier to this, the company secured two major contracts. In a joint venture with Rail Vikas Nigam Ltd (RVNL) where STEL holds a 49 per cent stake, they won a Rs 173.99 crore project from Madhya Pradesh Power Transmission Company Limited (MPPTCL). Additionally, STEL secured a significant Rs 1,033.78 crore contract from Tamil Nadu Generation and Distribution Corporation Limited (TANGEDCO).

The company issued bonus shares in a 4:1 ratio to its shareholders on February 1, 2024 (ex-date). This means that for every one share a shareholder held, they received four additional shares. The stock gave multibagger returns of 125 per cent in 1 year and a whopping 960 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.