Rs 2,388 crore order book: Multibagger penny stock rockets 14.3 per cent to an intraday high of Rs 20.15 per share; Spurt in volume by more than 5 times on BSE

The stock gave multibagger retunes of over 100 per cent from its 52-week low of Rs 9.06 and a whopping 1,400 per cent in 5 years.

On Wednesday, shares of Salasar Techno Engineering Limited (STEL) rocketed 14.3 per cent to an intraday high of Rs 20.15 per share from its previous closing of Rs 17.63 per share. At the closing bell, the company's shares were trading at Rs 19.10 per share, up 8.34 per cent and saw a spurt in volume by more than 5 times on BSE.  The company has not made any significant announcements of late. Hence, the rally in the share price could be driven purely by the market forces. 

Established in 2006, Salasar Techno Engineering Limited (STEL) is a leading provider of customized steel infrastructure solutions in India. They offer a comprehensive range of services, including engineering, design, fabrication, galvanization and installation. STEL's product portfolio includes various towers (telecom, power transmission, lighting, etc.), substations, solar structures, railway electrification components, bridges and custom steel structures. Moreover, they act as an EPC contractor, managing complete projects for rural electrification, power lines and solar plants. As of June 30, 2024, STEL has a strong order book of Rs 24,019 million.

According to Quarterly Results (Q2FY25), the revenue increased by 2.2 per cent to Rs 281.49 crore and net profit increased by 6.9 per cent to Rs 9.68 crore compared to Q2FY24 while in its half-yearly results (H1FY25), the net sales increased by 7.1 per cent to Rs 575.49 crore and net profit increased by 5 per cent to Rs 20.17 crore compared to H1FY24.

The company anticipates a robust growth trajectory, targeting a CAGR of at least 20 per cent for its top and bottom lines in the coming years. This growth is fuelled by a substantial order book of Rs 2,388 crore, encompassing domestic and international EPC orders, monopoles, heavy steel structure projects, and export orders for telecom towers and poles. The company maintains a consistent order inflow of Rs 30-35 crore per month for telecom towers. Additionally, it is actively pursuing opportunities in the EPC business to enhance margins. To solidify its financial position, the company is adhering to its long-term debt repayment schedule, aiming to significantly reduce its debt burden.

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 retunes of over 100 per cent from its 52-week low of Rs 9.06 and a whopping 1,400 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.