This automobile company delivered over 170% returns in a year; do you hold it?

An investment of Rs 1 lakh in the shares of this company 1 year ago would have turned to Rs 2.7 lakh today.

Sterling Tools Ltd, an S&P BSE SmallCap company, has delivered multibagger returns to its shareholders in the last one year. During this period, the company’s share price jumped from Rs 153.8 on 19th April 2022 to Rs 415.75 on 18 April 2023, an increase of 170% in the one-year holding period.

Recent performance highlights

In the recent quarter Q3FY23, on a consolidated basis, the company’s net profit increased by 140.20% YoY to Rs 13.92 crore. The company’s net revenue increased by 70.42% YoY to Rs 207.83 crore from Rs 121.95 crore. 

The company is currently trading at a PE of 38.3X against the industry PE of 42.8x. In FY23, the company delivered an ROE and ROCE of 8.34% and 9.97%, respectively. The company is a constituent of Group B stocks and commands a market capitalization of Rs 1,480 crore. 

Company Profile 

Sterling Tools Ltd was incorporated in 1979 and commercial production began in 1981. It made its first public offer in 1995 and began trading at Bombay Stock Exchange (BSE) and National Stock Exchange (NSE). As a premier producer of cold-forged hi-tensile fasteners, it supplies to all major auto OEMs. It is one of the leading suppliers in India with a client base that extends across India, USA, Europe, South America and the Middle East. 

Growth Drivers 

The company is engaged in manufacturing high tensile cold forged fasteners for Automotive Industry having its presence amongst all Auto Segments- Passenger Vehicle (PV), Commercial Vehicle (CV), Two Wheelers, Farm Equipment and Off-Roadways. Its subsidiary company Sterling GTAKE E-mobility Limited is engaged in the manufacture of Motor Control Units (MCUs) for the electric vehicle. 

Share price movements 

Today, the share of Sterling Tools Ltd opened at Rs 419.35 and has touched a high and low of Rs 419.35 and Rs 407.60, respectively. So far 4285 shares have been traded on the bourses.

At the time of writing, the shares of Power Mech Projects Ltd were trading at Rs 415.05, an decrease of 0.70% from the previous day’s closing price of Rs 415.75 on BSE. The stock has a 52-week high and low of Rs 456.75 and Rs 116.05 respectively on BSE.