This small-cap iron & steel company delivered impressive returns of over 500% in three years; do you hold it?

Steelcast Limited has delivered multibagger returns to its shareholders in the last three years. During this period, the company’s share price jumped from Rs 95.15 on October 30, 2020, to Rs 637.00 on October 26, 2023, an increase of more than 500%. An investment of Rs 1 lakh in the shares of this company three years ago would have turned into Rs 6 lakh today.

Business Overview:

Steelcast Limited was established by the Tamboli family of Bhavnagar, Gujarat. The company manufactures castings of various components, mainly for earth-moving equipment manufacturers, through the sand-casting process. It had a total casting capacity of 30,000 metric tons per annum (MTPA) as of March 31, 2023.

The company is one of the established manufacturers of steel and alloy steel castings in India with a long track record of operations of more than six decades and has an established marketing arrangement in domestic as well as international markets.

Financial Performance:

In the recent quarter, Q1FY24, the company reported a 43.43% increase in its net profit to Rs 20.28 crore, compared to Rs 14.14 crore for the same quarter in the previous year. The company’s net sales increased by 3.35% to Rs 119.49 crore for Q1FY24, compared to Rs 115.62 crore for the corresponding quarter in the previous year. The company has a ROCE of 42.2% and an ROE of 37.6% with a market capitalization of Rs 1,332 crore. The company is currently trading at a TTM PE of 17.4x, as against the industry PE of 29x.

Share Performance:

Today, the Steelcast Limited stock opened at Rs 669.55, with a high and low of Rs 699.55 and Rs 630.00, respectively. The stock is closed trading at Rs 659.55, with a decline of 1.78%. The stock has a 52-week high of Rs 781.00 and a 52-week low of Rs 416.00. In the last 6 months, the shares of the company have given more than 25% returns, and on a YTD basis, the stock has given about 40% returns

The stock has shown impressive growth and investors should keep a close eye on this stock.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.