Micro-cap multibagger stock hits back-to-back upper circuit; jumps over 16 per cent in morning trade!

The company has maintained a commendable Return on Capital Employed (ROCE) of 26.39 per cent.

On July 14, 2023, The Sensex and Nifty commenced the trading session with a 0.25 per cent increase. As the trading progressed, both indices continued their upward trajectory, trading higher by 0.37 per cent each, signifying a favorable market sentiment.

In this optimistic market sentiment, the shares of Magna Electrocasting Limited surged 16.17 per cent, the stock hits new 52-week high of Rs 593.85 per share on BSE. Additionally, the stock touched an upper circuit of Rs 593.85 per share on BSE. The scrip witnessed a massive spurt in volume by more than 9.90 times. The company's current market capitalization is Rs 241.23 crore.

Magna Electrocasting Ltd operates as a prominent manufacturer of Ferrous Components. With a specialization in Cast Iron Components, including Grey Iron, SG Iron, and other iron alloy castings, the company offers both machined and unmachined products. Catering to a diverse customer base, Magna Electrocasting serves both domestic and international markets, ensuring the supply of high-quality steel components alongside its iron offerings.

Magna Electrocasting Ltd has demonstrated impressive profit growth with a Compound Annual Growth Rate (CAGR) of 20.1 per cent over the past five years. This consistent growth indicates the company's ability to generate sustainable and positive financial performance.

The company has a significantly lower Price to Earnings (P/E) of 14.13 times, in contrast to PTC Industries, AIA Engineering, Bharat Forge, which have P/E ratios of 268.39, 29.85, and 75.67 times, respectively. The P/E ratio reflects the relationship between a stock's share price and its earnings per share (EPS), highlighting the favourable valuation of the company compared to its peers. 

Also, the company has maintained a commendable Return on Capital Employed (ROCE) of 26.39 per cent, indicating its efficient utilization of capital and strong profitability.

In the fiscal year 2022-2023, Magna Electrocasting Ltd recorded a total revenue of Rs 165 crore, indicating a substantial growth of 22.22 per cent compared to the previous fiscal year. Notably, the company achieved a remarkable increase in financing profit, reaching Rs 26 crore, which represents a significant 100 per cent rise from the previous year. Encouragingly, the net profit of the company witnessed an impressive surge of 112.5 per cent from the previous fiscal year, amounting to Rs 17 crore.

The stock has gained momentum in the past 1 year as it has given multibagger returns of more than 225 per cent. Moreover, the stock has surged more than 371 per cent in the last 3 years. 

Keep a close eye on this trending stock.