Multibagger stock under Rs 50: This micro-cap company reports a 76 per cent jump in net profit; scrip up by 2,700 per cent in 3 years!

In the previous financial year, the company announced bonus shares in the ratio of 4:1. The bonus issue went effective on January 06, 2023.

Rama Steel Tubes Ltd. is a leading manufacturer of steel tubes & pipes in India with 50 years of experience. It has 4 plants, 950 SKUs, 400 projects, a 20 per cent export rate, and 16 countries' presence. The company announced its unaudited financial results of the company for the Q1FY24 period. Here are the details:

Quarterly Results (Q1FY24) Earning Highlights:

• Revenue from Operations grew by 30.20 per cent from Rs 240.03 crore in Q1FY23 to Rs 312.52 crore in Q1FY24. This growth was led by robust demand for our products in the domestic market as reflected through the sales volume growth of 62.35 per cent on a YoY basis from 29,834 MT in Q1FY23 to 48,437 MT in Q FY24.
• EBITDA increased by 71.60 per cent from Rs 10 crore in Q1FY23 to Rs 17.14 crore in Q1FY24 led by an increase in the contribution of value-added products, increasing scale of operations, and improved manufacturing efficiency. EBITDA Margins increased by 138 bps from 4.10 per cent in Q1 FY23 to 5.48 per cent in Q1 FY24.
• PAT increased by 76.15 per cent from Rs 4.23 crore in Q1FY23 to Rs 7.46 crore in Q1FY24.
• PAT Margins increased on YoY basis at 2.38 per cent in Q1FY24 against 1.74 per cent in Q1FY23.

Additionally, as per bulk deal data available on BSE, Societe Generale, a Foreign Institutional Investor (FII) picked up 60,00,000 shares in Rama Steel Tubes on July 18, 2023, at an average price of Rs 38.17 per share totalling to Rs 22.90 crore.

Commenting on the performance of Q1 FY24, the management team of RSTL added:

Rama Steel Tubes Ltd. (RSTL) saw a 62.35 per cent increase in sales volume in the first quarter of FY24. This was driven by demand and RSTL's proactive approach, but margins were hit by steel price pressure and Chinese imports. RSTL expects prices to stabilize and has partnered with JSW Steel for raw materials, supply chain, and branding to gain market share. RSTL is confident of achieving growth and success in the coming quarters due to strong demand for steel products, a structural shift to steel tubes and pipes, government push, economic growth, and favourable market conditions. The company also expressed its gratitude to its stakeholders for their support.

On Wednesday, shares of Rama Steel Tubes Ltd plunged 1.21 per cent to Rs 38.41 per share with an intraday high of Rs 38.90 and an intraday low of Rs 37.90. In the previous financial year, the company announced bonus shares in the ratio of 4:1. The bonus issue went effective on January 06, 2023.

The company have a market cap of Rs 1,825 crore with a 3-year stock price CAGR of 207 per cent. The stock gave multibagger returns of 290 per cent in just 2 years and over 2,700 per cent returns in 3 years. Investors should keep an eye on this Small-Cap stock.

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