The shares of this microcap company locked in a 5 percent upper circuit after the Board of Directors approved a forward integration project with a maximum investment of Rs 50 crores. The owners of the shares have received a return on investment of almost 200 percent.
Price Movement: Rathi Steel & Power Ltd.’s shares, which have a market value of Rs. 555 crores, began trading on Tuesday at a higher price of Rs. 64.70, up from its previous close of Rs. 62.38. The shares recorded a 5 percent higher circuit at Rs. 65.49 a share during the trading session.
The firm revealed in an exchange filing that it intends to invest up to Rs. 50 crores to build up a forward integration project at its current facility in Ghaziabad, which is why the share price saw such a positive rise. Wire rods will be processed here to create downstream goods like wires and light bars, among other things. As a strategic endeavor, this project will increase capacity utilization by bringing some of its current manufacturing in-house.
Furthermore, this will enable the firm to expand its supply chain to industries including automotive (including batteries and EVs), defense, solar, engineering, and home goods, either directly or through B2B clients that make use of these services.
Financials: The sales increased by 8% from Rs. 118.35 crores in the March quarter to Rs. 127.73 crores in the June quarter, according to the company’s financial filings. Conversely, over the same period, net income decreased by 87%, from Rs. 20.13 crores to Rs. 2.69 crores.
Key financial Ratios: disclosed by the firm for the FY23–24 period were as follows: return on equity (RoE) of 21.24 percent and return on capital employed (RoCE) of 10.62 percent. Additionally, the net profit margin was 4.77 percent throughout that same period.
Shareholding Pattern: As of right now, the Promoters control 40.32 percent of the shares in the firm. 2.89 percent is held by Domestic Institutional Investors (DIIs). Retail investors own the remaining 47.84 percent, with foreign institutional investors (FIIs) holding 8.95 percent.
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