Multibagger Sree Rayalaseema Stocks Earned 530% Return in 3 Years!

Company Overview

Sree Rayalaseema Hi-Strength Hypo Ltd is engaged in the manufacturing of industrial chemicals, power generation, and trading activities. The company operates through three segments: Chemicals, Trading, and Power Generation. Power is generated by utilizing wind, solar, and thermal energy sources.

The company’s product portfolio encompasses a wide range of chemicals, including sulphuric acid, calcium hypochlorite, stable bleaching powder (SBP), chlorosulphonic acid, chloramine, purichlor, oleum, hydrochloric acid, monochloride acetic acid, sodium methoxide powder, sodium methoxide solution, sodium dichloroisocyanurate, hydrogen gas, and water treatment chemicals.

Incorporated in 2005, is Located in Gondiparla, Kurnool District, Andhra Pradesh, the company operates SBP plants, as well as plants for sulphuric acid, chlorosulphonic acid, and calcium hypochlorite (hi-strength hypo). Additionally, their windmill power units are situated in the state of Tamil Nadu.

Stock Performance

Today, the stock commenced trading at Rs 641.8, representing a 1.8% increase from the previous day’s closing price of Rs 630.80. Eventually, it concluded the day at Rs 733.50 on the BSE. The stock’s 52-week highs and lows are Rs 950.80 and Rs 375 respectively. Currently, its market capitalization stands at Rs 1259 Crore.

Over the past year, the stock has delivered an impressive return of 68%, while in the last three years, it has achieved a remarkable multibagger return of 530%.

In terms of ownership, the promoters hold 62.09% of the company’s shares, while foreign institutional investors (FIIs) and domestic institutional investors (DIIs) hold 0.59% and 0.04%, respectively rest 37.28% are held by Public investors.

Financial Performance

If we check the company’s financials, annual revenue experienced a substantial increase of 30.21%, rising from Rs 1267 Crore to Rs 1650 Crore. The company’s sales have shown a CAGR growth of 34% in the last three years. The operating profit of the company stands at Rs 178 Crore, accompanied by an operating profit margin of 11%. 

Furthermore, the net profit of the company amounts to Rs 154 Crore. It has delivered a good profit growth of 60% CAGR in the last three years. The company’s return on capital employed (ROCE) and return on equity (ROE) are reported as 28.2% and 23.4%, respectively.

If we check the size of the balance sheet it has grown from Rs 311 Crore to Rs 919 Crore in FY23. Reserves and surplus have grown from Rs 553 Crore to Rs 734 Crore whereas the debt on the balance sheet is significantly less, at around Rs 16 Crore with a debt-to-equity ratio of just 0.02 times.

Conclusion

Sree Rayalaseema Hi-Strength Hypo Ltd has had an outstanding financial performance over the past ten years and the stock is currently trading at a Price to earnings ratio of just 8 times in the market. If we check the book value of the company, it is Rs 438 and the stock’s current price is Rs 731 and it trades just 1.7 times from its book value. 

In FY23 company registered earnings per share grew by 50% from Rs 59.88 to Rs 89.90. This year company’s revenue touched a significant milestone of over Rs 1500 Crore and reported revenue of Rs 1650. Their bottom line as well as down line both are growing consistently which attracted investor’s interest in this stock. 

Investors must keep this company on their radar.