Godawari Power & Ispat Shares are at an all-time high; rallying 48% in a month

Today, the shares of Godawari Power & Ispat Ltd zoomed over 6% during the intraday session and currently trading around Rs 535. The stock commenced trading at Rs 505.05, approximately 1% up from the previous day’s closing price of Rs 501.35. 

The stock was facing a hurdle to cross the price level of Rs 500. On June 21, 2023, it made an effort to break through this resistance and close above Rs 500. However, due to significant bearish pressure, the stock ended up closing below it at Rs 495.10. On Wednesday, the stock made another attempt to breach the Rs 500 threshold and ultimately succeeded, closing above it at 501.35. 

Before this recent breakthrough, the company’s shares made an attempt to reach the Rs 500 level on April 19, 2022. It took approximately 437 days to successfully breach this level. Today, not only did the stock surpass this hurdle, but it also exhibited significant strength, indicating that bullish sentiment is prevailing, with increased interest from buyers at this level. 

The stock’s 52-week highs and lows are Rs 544.40 and Rs 245.45 respectively. Currently, its market capitalization stands at Rs 7493.34 Crore. The stock is trading at Price to earnings of just 9.35 times. 

In just one month, the stock rallied over 48%, whereas it has delivered an impressive return of 113% in a year. Furthermore, in the last three years, it has achieved a remarkable multibagger return of 1160%. 

In terms of ownership, the promoters hold 67.68% of the company’s shares, while foreign institutional investors (FIIs) and domestic institutional investors (DIIs) hold 3.46% and 1.02%, respectively. The rest portion of 27.84% is owned by Public Investors as per the latest quarter update. 

Financial Performance 

If we check the company’s financials, in the recent quarter company’s revenue declined by 8.44% from Rs 1438 Crore to Rs 1317 Crore. The operating profit of the company is Rs 268 along with a margin of 20%. The net profit of the company in the same quarter is Rs 170 Crore. 

In FY23, annual revenue experienced an increase of 6.60%, rising from Rs 5397 Crore to Rs 5753 Crore. The operating profit of the company stands at Rs 1133 Crore, accompanied by an operating profit margin of 20%. Furthermore, the net profit of the company amounts to Rs 793 Crore. The company’s return on capital employed (ROCE) and return on equity (ROE) are reported as 28.1% and 22.3%, respectively. 

The Book value of the company is Rs 277 and the stock is trading in the Indian market is around Rs 535 which is 1.93 times its book value. The debt mentioned on the balance sheet is Rs 317 Crore. At the same time, Cash and Cash Equivalent are Rs 800 Crore.  

Company Overview 

Godawari Power & Ispat Ltd is primarily involved in the business activities such as the mining of iron ore, manufacturing of iron ore pellets, sponge iron, steel billets, wire rods, H.B. Wire, Ferro alloys, and electricity generation. 

It operates through two main segments: Steel and Electricity. It serves both the domestic market and the export market. It is actively engaged in the iron and steel industry, power sector, and mining sector. It possesses an integrated steel manufacturing unit that encompasses various facilities such as captive iron ore mining, production of iron ore pellets, sponge iron, steel billets, rolled products, wires, Ferro alloys, and a captive power plant. 

The company’s pellet plant is located in the Keonjhar district of Odisha, with a railway siding situated approximately three kilometres away from the plant for efficient transportation of pellets. Additionally, the company operates a solar thermal power plant with a capacity of over 50 megawatts in the Jaisalmer district of Rajasthan. It is located in Rajpur District, Chhattisgarh, India. The company has subsidiaries named Godawari Energy Limited and Godawari Green Energy Limited, which are part of its business operations