An investment of Rs 1 lakh in this stock doubled in a month; details inside

Yes, you have read the title correctly. If you had invested Rs 1 lakh in this newly listed multibagger stock a month ago, you would have doubled your money.

Before revealing the company’s name, we would like to provide a brief introduction to its business. The company provides engineering, procurement, and construction services, along with operations and maintenance services to companies operating in the telecommunications and solar energy industries. The company’s stock made its market debut on August 30, 2023, and the company’s name is Bondada Engineering Limited.

At the time of writing the article, the stock is trading at Rs 372 per share, which is slightly lower than the previous day’s closing price of Rs 384.70 per share. The stock opened the day at Rs 403.80 per share, reaching intraday highs and lows of Rs 403.80 and 365.50 per share, respectively.

The current market capitalisation of the company stands at Rs 804 crore, and the stock has delivered an impressive multibagger return of over 105% within a month. Notably, an investment of Rs 1 lakh has grown to Rs 2 lakh in just one month. As mentioned, the stock recently debuted in the market. Let’s briefly explore the subscription history during the IPO.

IPO Recap 

The stock debuted on August 30, 2023, at a stellar premium of 90%, and opened the day at Rs 142.50 per share on the NSE. This marked a substantial return for investors on the listing day itself.

During the final day of the IPO window, it garnered a subscription rate of 112.28 times. The public issue received an overwhelming response, with the retail category oversubscribed by 100 times and the NII category achieving a subscription rate of 115.46 times.

The IPO price range was set at Rs 75 per share, with a face value of Rs 10 per share and a lot size of 1,600 shares. The total size of the company’s IPO was Rs 42.72 crore, and the final share issue price was fixed at Rs 75 per share.

Financial Overview 

In the second quarter of FY24, the company achieved impressive financial results, reporting revenues of Rs 296 crore. This represents a remarkable growth of 152% YoY compared to the same quarter in the previous year when the revenue was Rs 117 crore. The company’s operating profit for the quarter stood at Rs 20 crore, compared to Rs 9 crore during the same quarter in the previous year. The operating profit margin for the company during this quarter was 7%.

Shifting our attention to the company’s net profit, it amounted to Rs 15 crore, a substantial increase compared to the profit of Rs 4 crore in the corresponding quarter of the previous year. This demonstrates a remarkable threefold growth in profit.

The company’s Return on Capital Employed (ROCE) and Return on Equity (ROE) stand at 22% and 26%, respectively, indicating strong financial performance. Additionally, the company’s stocks are currently trading at a Price-to-Earnings (PE) ratio of 45.6 times in the market.

Business Overview 

Bondada Engineering Limited offers engineering, procurement, and construction (EPC) services, as well as operations and maintenance (O&M) services to businesses within the telecommunications and solar energy sectors.

The company specialises in providing passive telecom infrastructure solutions, encompassing activities such as constructing, erecting, operating, and maintaining telecom towers, complete with civil, electrical, and mechanical components. They also supply poles and towers, handle the installation and upkeep of optical fibre cables, and provide power equipment and other related infrastructure services to major telecommunications firms and tower operators in India. To date, the company has successfully deployed more than 11,600 telecom towers and poles, with 7,700 of them being erected in the last three fiscal years.

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.