Shares of this company soared over 18%, making it the BSE smallcap top gainer; do you own it?

Shares of Timken India traded at a new 52-week high with an 8-fold spurt in volume.

Shares of Timken India Ltd traded at a new 52-week high at Rs 3506 as it gained more than 18% on Thursday. The stock is experiencing heavy buying pressure as the volume spurt by 8.58 times, indicating the interest of investors.

The rise in share price was majorly due to positive results and the decision by management to increase production capacity. The company will invest USD 74 million to set up a new plant in Gujarat as management expects the demand to go up in future.

Timken India Ltd was set up in 1987 and is a part of Timken Group. It is primarily engaged in the manufacturing of antifriction bearings, components, and related parts. In Q2FY23, sales and the net profit of the company grew by 24% compared to the same quarter of the previous financial year. The company is almost debt free and is having cash in the form of reserves, making it less prone to bankruptcy and enabling them to a rapid expansion of business if needed.

The company maintains a healthy ROCE of 28.7% and an ROE of 21.8%. It has delivered profit growth of 27.5% CAGR over the last 5 years. Promoters' holding is constant over the period, whereas FIIs are increasing their stake in the past three quarters.

The stock has generated 68% returns in the past 6 months and 304% returns in 5 years compared to price as of today. The dividend payout ratio was good as it stood at 54.7%. 

Investors should keep an eye on this stock from a long-term perspective.