Indian benchmark indices have witnessed a positive opening on Tuesday with Sensex inching closer to the important psychological mark of 62,000, while the Nifty is trading above the 18,300 mark.
The broader markets have seen outperforming the frontline indices with Nifty Midcap and Smallcap index trading higher by 0.37% and 0.65%, respectively. Among the Smallcap stock, one stock which has caught attention of the investors’ is Shriram Pistons & Rings Ltd.
Shriram Pistons & Rings Ltd (SPR) has an exceptional lineage of the Shriram Group, one of India’s oldest and most reputed industrial houses.
Company is the largest exporter of Pistons and Rings from India to discerning customers, including Ford, Honda, Kia, Renault, WABOC and has the ‘Trading House’ status from Government of India. Development and manufacturing of latest technology products for OEMs in Europe, USA, etc. challenges the enterprise to hone its manufacturing processes, technology and quality to global standards. This acts as a catalyst to transform the entire organisation. Not surprisingly, SPR and USHA are also amongst the best recognized brand names in the aftermarket abroad.
The stock has been locked at an upper circuit limit of 5% on Tuesday and only buyers are seen in the stock. The key catalyst for this robust performance of the stock on Tuesday is because the stock had come out with its earnings post market on Monday and its important to take note of it as the profit swelled and operating margins firmed up.
For the quarter ended March 31, 2023, the stock reported a jump of 19.37% YoY in sales to Rs 701 crore. Operating profit of the company stood at Rs 135 crore and interestingly, the operating margin of the company stood at 19%. Net profit jumped 82% YoY to Rs 91 crore in the quarter ended March 31, 2023 as against Rs 50 crore in quarter ended March 31, 2022.
Along with robust financial performance the cherry on the top is that the board has recommended a special “Golden Jubilee” final dividend of Rs 15 per equity share for the year ended March 2023, inclusive of the interim dividend of Rs 10 per share already paid. The final dividend is subject to shareholders’ approval in the ensuing Annual General Meeting.
The stock performance has been something one should not miss to look at. The stock has delivered a multibagger return of about 134% in the last three years and in the last one year the stock is up by nearly 90%. Now, here is an interesting fact, despite such a solid performance, the stock is trading at PE of 9.7x. The ROE stands at 21.1% and with the pedigree of Shriram group to its legacy this stock is definitely the one to keep on the radar!
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