This supplier to chemical and pharmaceutical companies has delivered 4.2x returns within two years

Multibagger Stock

by 5paisa Research Team Last Updated: 2022-05-25T18:33:23+05:30

Multibagger stock who supplies process equipments to chemical and pharmaceutical companies. 

Two years back, on 26th May 2020, the stock was trading at Rs 765. In 2 years, the stock rallied to Rs 3230, delivering more than 4-fold returns for its investors. The stock also made a 52-week high of Rs 7549 on 18th October 2021. This stock belongs to the S&P 500 SmallCap index and has a market capitalization of Rs 4,491.73 crore. The name of the stock is HLE Glascoat Ltd. 

HLE Glascoat is a process equipment manufacturer and solution provider to the chemical and pharmaceutical industries. The company’s products are used for storage, reaction, heat transfer, distillation and solid-liquid separation. Product categories of the company are- filtration & drying equipment, glass-lined equipment, exotic metal equipment, and cGMP pharma models. 

Filtration & drying equipment contributes 50%, glass lined equipment contributes 41%, and the remaining categories contribute 9% to the total revenue of HLE Glascoat. The company is the market leader in filtration & drying equipment with 60% domestic market share and the second-largest manufacturer of glass lined equipment with 30% domestic market share. 

HLE Glascoat’s financials have shown strong growth over the last 3 years. The consolidated revenue of the company grew by 82% from Rs 359 crore to Rs 652 crore. The net profit more than tripled during the same period. Company's operating margin for three years on an average is 92%. HLE Glascoat enjoys huge operating margins due to its high market dominance in the industry, economies of scale, competitive pricing, and a proven track record of delivering excellence in engineering. 

Talking about the industry, the stock benefited from the strong domestic demand in the chemical and pharmaceutical industry which was fueled by the government's push towards self-sustainability, the China +1 strategy adopted by various countries to diversify their supply chain. 

HLE Glascoat Ltd stock is trading at Rs 3289 on 25th May 2022. 


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