Multibagger penny stock under Rs 80 with 3,675 per cent returns hit upper circuit on August 09; Company is debt-free & FIIs bought 76,15,502 shares!

From Rs 11.82 (52-week low) to Rs 79.29 per share, the stock gave multibagger returns of 571 per cent in just 1 year and a whopping 3,675 per cent in 5 years.

Today, shares of Rathi Steel and Power Ltd hit a 5 per cent upper circuit to Rs 79.29 per share from its previous closing of Rs 75.52. The stock’s 52-week high is Rs 97.81 while its 52-week low is Rs 11.82. The shares of the company saw a spurt in volume by more than 3 times on BSE.

Established in 1971, Rathi Steel and Power Ltd, a Delhi-based steel manufacturer, offers Rebars and Wire Rods under the "RATHI" brand across 1,000 retail outlets and also supplies stainless steel products to major producers of downstream goods like Bright Bars and fasteners. Their clientele boasts esteemed names like the Airports Authority of India, Delhi Metro Rail, and NTPC. The company has a market cap of over Rs 670 crore.

Rathi Steel and Power Limited, a leading Indian stainless-steel producer, is revolutionizing wire rod manufacturing with its adoption of direct charging. By bypassing the traditional reheating process, the company is feeding molten steel directly into the rolling mills. This groundbreaking approach dramatically reduces fuel consumption and waste, significantly lowering the company’s carbon footprint. Previously, direct charging was primarily confined to carbon and mild steel production. Beyond environmental benefits, direct charging enhances operational efficiency and profitability for Rathi Steel and Power. By streamlining the production process, the company optimizes resource use, cuts costs, and gains greater control over pricing. This technological advancement solidifies Rathi Steel and Power’s position as a sustainability leader while driving financial growth.

According to Quarterly Results, the net sales increased by 17 per cent to Rs 118.35 crore and net profit increased by 2,457 per cent to Rs 20.20 crore in Q4FY24 compared to Q3FY24. In its annual results, the company reported net sales of Rs 492.83 crore and a net profit of Rs 23.61 crore in FY24 while in FY23, the company reported net sales of Rs 726.55 crore and a net profit of Rs 87.47 crore. Rathi Steel overcame significant hurdles including economic downturn, raw material shortages, and intense competition to achieve a remarkable turnaround in FY24. Through strategic restructuring, debt repayment, and a shift towards high-margin stainless steel products, the company eliminated debt.

In June 2024, FIIs bought 76,15,502 shares or 8.95 per cent stake in the company. The promoters of the company own a 40.32 per cent stake, FIIs own 8.95 per cent, DIIs own 2.89 per cent and the public owns a 47.85 per cent stake as of June 2024. From Rs 11.82 (52-week low) to Rs 79.29 per share, the stock gave multibagger returns of 571 per cent in just 1 year and a whopping 3,675 per cent in 5 years. Investors should keep an eye on this micro-cap stock.

Disclaimer: The article is for informational purposes only and not investment advice. 

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