This cylinder manufacturer stock was trending today!

This cylinder manufacturer stock was trending today!

by 5paisa Research Team Last Updated: Dec 23, 2022 - 05:13 pm 6.6k Views
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The stock surged more than 10% on Friday

On December 23, for the third consecutive day, the market closed trading in the red. The S&P BSE Sensex closed at 59845, down 1.61% for the day. Regarding sectoral performance, Financials and Healthcare outperformed the market, while Metals and Power were the top losers.

Talking about a stock-specific action, Everest Kanto Cylinder Ltd was the top gainer among S&P BSE group ‘A’ companies. The shares of Everest Kanto Cylinder Ltd closed at Rs 103.5, surging 10.81% from its previous close of Rs 93.4. The stock opened at Rs 93 and made an intraday high and low of Rs 108.6 and Rs 93, respectively.

Everest Kanto Cylinder Ltd is involved in the business of manufacturing high-pressure gas cylinders and other equipment used to compress and storage natural gas, liquids and air. Everest Kanto’s cylinders are also used in fire extinguisher, healthcare, defense, food and beverage sectors.

The company caters to major OEMs and City Gas Distributors. Bajaj Auto Limited, Tata Motors Limited, Ashok Leyland, Torrent Gas, HPCL, IOCL, Safepro, Ecofuel are among the company’s clients.

Stringent regulations imposed by various organisation like Petroleum and Explosive Safety Organization makes it difficult for new entrant to establish itself in this high-pressure cylinder manufacturing business. Seamless steel tubes are major raw material for the company. No major uptick in the steel price is anticipated for the near future.

As per FY22, the company has ROE and ROCE of 33.9% and 40.9%, respectively. About 60% of the company’s revenue comes from CNG, while 40% comes from industrial and specialty gases like Nitrogen, Helium, Argon, etc. The company has two manufacturing plants which are operating at 90% utilization as of FY22 period ending.

The company has a market capitalisation of Rs 1160 crore and its shares are trading at a PE multiple of 6.3x.

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