Shares of a micro-cap steel manufacturer surged 5 percent to hit the upper circuit after the company secured four significant orders for supplying 450 MT of Demac GP pipes and tubes, highlighting strong demand and robust business momentum.
Price Action
During Friday’s trading session, Newmalayalam Steel Ltd’s share price reached an intra-day high of Rs.73.15 per share on Friday, hitting the 5 percent upper circuit from its previous close of Rs.69.70 per share.
What happened
Newmalayalam Steel Ltd has secured four significant purchase orders dated 2nd January 2025, from prominent domestic entities, including Global Trade Links (Angamaly), Aashico Ventures LLP (Kochi), Kunnath Steels (Thrissur), and National Steel Distributors (Kochi).
The orders, valued at Rs.3.22 crores inclusive of GST, involve the supply of 450 MT of Demac GP Pipes and Tubes. These contracts are based on a sale arrangement and are to be executed within 30 working days, highlighting the company’s strong domestic market presence and operational efficiency.
Products and Services
Newmalayalam Steel is a leading manufacturer of galvanized pipes, tubes, and sheets. Its products are widely used in households across Kerala, particularly for roofing solutions that help reduce heat and prevent leakage.
Beyond residential use, Newmalayalam Steel serves various industries, including building construction, architecture, automobiles, solar panel frames, interior design, furniture, and decor. The company’s diverse product range includes GP pipes, GI pipes, coils, sheets, slits, and additional items like scrap and rejected pipes.
Business Expansion
Newmalayalam Steel has outlined several key objectives to drive its business expansion, including upgrading its manufacturing technology to enhance production efficiency, expanding its solar power generation capabilities for sustainable energy use, and constructing new facilities for production and storage.
Additionally, the company aims to strengthen its marketing efforts to increase brand visibility and support working capital requirements to sustain growth.
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Financial Performance
As per its latest financial results, the company recorded consolidated revenue of Rs.300 crore in FY24, reflecting a 15 percent decrease from Rs.354 crore in FY23. However Net profits decreased 33 percent from Rs.6 crore to Rs.4 crore during the same period.
Its price-to-earnings ratio stands at 28.22, slightly more than the industry average of 26.12. The company showcases a current ratio of 3.73 and a debt-to-equity ratio of 0.86.
Company Overview
Newmalayalam Steel Limited, a key player in the steel manufacturing industry, specializes in producing galvanized pipes, tubes, and sheets. Established in 2017 after acquiring M/s. Demac Steel, company commenced manufacturing operations in 2018. Operating under the “Demac Steel” brand, it provides durable, rust-resistant solutions tailored to meet Kerala’s construction requirements.
Written by – Siddesh S Raskar
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