This iron and steel company delivered over 184% returns in a year; do you hold it?

This iron and steel company delivered over 184% returns in a year; do you hold it?

An investment of Rs 1 lakh in the shares of this company one year ago would have turned to Rs 2.84 lakh today.   

Rama Steel Tubes 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 13.64 on 267h May 2022 to Rs 38.87 on 29th May 2023, an increase of 184% 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 38.25% QoQ to Rs 6.40 crore. The company’s net sales increased by 89.34% YoY to Rs 350.25 from Rs 184.98 crore. 

The company is currently trading at a PE of 74.7X against the industry PE of 16.6X. In FY23, the company delivered an ROE and ROCE of 24.1% and 20.8%, respectively. The company is a constituent of Group B stocks and commands a market capitalization of Rs 1,806 crore. 

Company Profile 

Rama Steel Tubes is one of the accredited organizations dealing in manufacturing, supplying and exporting of steel pipes, steel tubes and fittings.  With its 20% exports rate, the company has a global presence in the Countries like United Kingdom, UAE, Sri Lanka, Ethiopia, Kenya, Uganda, Ghana, Kuwait, the Republic of Congo, Yemen, Guyana, Germany, USA, South Africa, Zambia and Malta etc. being its prime markets. 

Growth Drivers 

The company has its state-of-the-art plant in the industrial belt of Sahibabad, about 10km from the Indian capital, New Delhi. It is perhaps the best plant producing steel pipes like black steel pipes, black steel tubes, etc. with the hi-tech machinery and sophisticated testing equipment. The company has a strong and extensively experienced staff whose expertise goes into the making of the products. The company works hard to maintain the quality of its products and at every stage of its production has meticulous checks, tests and controls. 

Share price movements 

Today, the share of Rama Steel Tubes Ltd opened at Rs 39.37 and has touched a high and low of Rs 39.90 and Rs 38.78, respectively. So far 3,14,442 shares have been traded on the bourses.  

At the time of writing, the shares of Rail Vikas Nigam Ltd were trading at Rs 38.77, an increase of 0.68% from the previous day’s closing price of Rs 38.51 on BSE. The stock has a 52-week high and low of Rs 46.10 and Rs 13.32 respectively on BSE.