Gandhi Special Tubes achieves 200% returns in 3 years

Gandhi Special Tubes is engaged in the production and promotion of welded and seamless steel tubes in various sizes and specifications, as well as Cold Formed Coupling Nuts. These items are primarily distributed to Original Equipment Manufacturers (OEMs) in the automotive sector, Farm Equipment manufacturers, Construction equipment manufacturers, and other Engineering Industries. The company also has a minor presence in the Power Sector through the operation of Windmills in Maharashtra and Gujarat. 

The production of Seamless Tubes accounts for over 80% of the company’s revenue, while the remaining revenue is generated from other products, including Welded Tubes, Cold Formed Nuts, and wind power generation. They are the sole integrated facility in India specializing in small diameter cold drawn seamless steel tubes. Being the only local player of scale and quality approved by major local and global OEMs gives them a competitive advantage. 

Furthermore, the company reported its FY23 results in which sales of the company grew by 21.8% to Rs 167 crore while the operating profit of the company grew by 24.5% which stood at Rs 61 crore. Similarly, the net profit of the company surged by 20% and stood at Rs 47 crore as compared to FY22. Moreover, the company has been able to grow its sales by 27% (CAGR) for the past 3 years and net profit has grown by 30% (CAGR) for the same period. In addition to this, the company is almost debt free. 

The company has delivered returns of 61% over the past year and returns of 201% over the past 3 years. Moreover, the stock has a ROCE of 38.2% and a ROE of 28.8%. Furthermore, the company has a dividend payout ratio of 31.5%. 

On Wednesday, shares of the company plunged by 0.40% and traded at Rs 580.35. Additionally, in recent times the stock has been consistently experiencing surge in volumes. 

Investors should keep a close eye on this trending 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.