High ROE Multibagger Railway Stock Under Rs 100 In Focus As Company Completes Investment in Wholly Owned Subsidiary SOA Electronics Trading LLC

The stock gave multibagger returns of 150 per cent in 1 year, 300 per cent in 3 years and a whopping 11,200 per cent in 5 years.

MIC Electronics Limited informed that the competent authority in Dubai has issued the necessary approvals for its investment of Rs 51 crore in its wholly owned subsidiary, SOA Electronics Trading LLC. This investment constitutes a 100 per cent subscription to the Paid-Up Share Capital of SOA Electronics Trading LLC, a company incorporated in Dubai on May 9, 2024. SOA Electronics Trading LLC has a share capital of AED 22,408,000 divided into 22,408 shares, each valued at AED 1,000. The subsidiary operates in the Electrical & Electronic Appliances Spare Parts Trading industry.

This investment was made in cash and represents an overseas direct investment by the Company. SOA Electronics Trading LLC is a related party of MIC Electronics Limited. This transaction was conducted at arm's length, and no other promoters, promoter groups, or group companies have any interest in SOA Electronics Trading LLC. The acquisition of this subsidiary is aimed at expanding the Company's business operations in the Electrical & Electronic Appliances sector within the Dubai market. All necessary regulatory approvals from the Dubai authorities have been obtained for this investment.

Additionally, the Competent Authority had approved the capacity cum capability assessment (CCA) of the company for Item ID: 3100369, Microprocessor controller for roof-mounted AC package unit for LHB coaches and double-decker coaches.

Earlier, the company received approval from the Competent Authority to supply GPS Location-based Public Address & Passenger Information Systems (PAPIS) and LED Destination Boards to Indian Railways coaches. This follows a successful Capacity Cum Capability Assessment (CCA) for item ID 2400064, aligning with RDSO/CG-18001 (Rev.2) specifications. This approval stems from the company's registration request (ID 24384) submitted in July 2024, enabling them to participate in procurement processes. Before this, MIC Electronics secured a Rs 1,21,90,343.51 contract for CIB services at Abhaipur station and established a wholly owned subsidiary, MICK Digital India Limited, to expand its business ventures.

MIC Electronics Ltd., founded in 1988, is a leading manufacturer of LED displays (indoor, outdoor, mobile), lighting solutions (indoor, outdoor, solar), telecom equipment and software. They also produce medical equipment like oxygen concentrators and batteries. Headquartered in India, MIC exports its products globally and has a presence in the USA, Australia, UK and other countries.

According to Quarterly Results, the net sales increased by 5 per cent to Rs 11.20 crore and net profit increased by 7 per cent to Rs 2.11 crore in Q2FY25 compared to Q1FY25. Looking at the consolidated annual results, the company reported net sales of Rs 22.91 crore and net profit of Rs 0.26 crore in FY24. Looking at its half-yearly results, the net sales increased by 313 per cent to Rs 18.57 crore in H1FY25 compared to H1FY24 while the company reported a turnaround net profit of Rs 10.05 crore in H1FY25 compared to a net loss of Rs 1.25 crore in H1FY24, an increase of 704 per cent.

MIC Electronics has a market cap of over Rs 2,000 crore and has delivered good profit growth of 32.1 per cent CAGR over the last 5 years with an ROE of 60 per cent. The stock gave multibagger returns of 150 per cent in 1 year, 300 per cent in 3 years and a whopping 11,200 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.