Multibagger: This small-cap stock gave 400% returns in less than one year!

Multibagger: This small-cap stock gave 400% returns in less than one year!

by 5paisa Research Team Last Updated: Dec 15, 2022 - 06:33 pm 49.4k Views

Rajratan Global Wire is competitively placed to benefit from rising demand for personal means of transportation, the need for proximate and secure supply chains and the government’s ‘Aatmanirbhar Bharat’ policy.

Rajratan Global Wire Ltd, an Indian company engaged in the manufacturing of bead wire and high carbon steel carbon wires has turned into a multibagger by delivering massive returns of 400% as of October 13, 2021. The stock which was trading at Rs 444.3 on January 1, 2021, closed at Rs 2,221.45 on October 13, 2021. It made a 52-week high of Rs 2,737.8 on August 4, 2021. 

Rajratan is one of the largest bead wire manufacturers in Asia. It aims to become the leading and most preferred bead wire manufacturer and supplier to tyre companies in India and globally. The company has a strong foothold abroad with exports to countries like Italy, the USA, The Czech Republic, South Korea, Malaysia, Indonesia, Philippines, Vietnam, Sri Lanka, Finland and Bangladesh, among others.

In Q1FY22, on the consolidated front, the revenue of the company stood at Rs 182.29 crore as against Rs 64.65 crore in Q1FY21, registering a growth of 181.96% YoY. The revenue growth was aided by strong demand from domestic tyre manufacturers and increased exports. The EBITDA stood at Rs 36.01 crore, which was a growth of 364.05% over Rs 7.76 crore in Q1FY21. The PAT came in at Rs 21.92 crore as against Rs 1.65 crore in the previous year, with a YoY increase of 1228.48 per cent.

Keeping the rising demand in mind, it allocated Rs 26.48 crore, which accounted for 39% of its FY21 revenue towards capacity expansion. To tackle the challenge of the rising cost of raw materials, the company passed on the price increase to the customers. It plans to broaden its customer base across USA and Europe. To enhance capacity utilization by the end of FY22, land for the proposed plant in South India is under finalization. In three years' time, it intends to possess a consolidated bead wire capacity of 1,80,000 TPA and become completely free of long-term debt. Going forward, the company is likely to witness a rise in demand from the domestic and international markets.

At 2.30 pm on Thursday, the share price of Rajratan Global Wire Ltd was trading at Rs 2273, an increase of 2.32% over the previous day’s closing price of Rs 2221.45 on BSE.

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