The shares of this small-cap steel stock engaged in steel wire manufacturing and by volume are the second-largest steel wire manufacturer in India surged 8 percent after the company reported an 122 percent year-on-year increase in net profits and revenue growth in its recently released quarterly results.
Share Price Movement
The share price of Bansal Wire Industries Ltd opened at Rs. 440 and touched a high of Rs.448 per share on Tuesday’s intraday trade, rising 9.8 percent from its previous close of Rs.407.65 per share. However, the shares have adjusted since then and are now trading at Rs.440 each.
What Happened
The stock movement was due to an earnings update which is released by the company. The company posted a significant increase in net profits and a jump in revenue in Q2FY25.
According to its recent filing, In Q2FY25, Bansal Wire Industries Ltd reported a 36.81 percent increase in revenue to Rs.825 crore in Q2FY25, compared to Rs.603 crore in Q2FY24. Furthermore, quarterly, the company saw an increase of 0.97 percent in revenue from Rs.817 crore in Q1FY25.
In the same period, the company reported a significant increase in net profit of 122 percent to Rs.40 crore in Q2FY25, up from Rs.18 crore in Q2FY24 and a 25 percent increase from Rs.40 crore in Q1FY25.
In terms of return ratios, return on capital employed (ROCE) is currently at 15.31 percent, while return on equity (ROE) is at 22.36 percent. The company has a strong current ratio of 5.69 and a debt-to-equity ratio of 0.21 in FY24.
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Future Plans
For this financial year, the company expects the Dadri plant to be fully operational driving growth of sales. Group consolidating through the Job Work model for operational efficiency.
They plan to enter the B2C segment with a focus on Agriculture and they plan to Introduce higher-margin products in fast-growing sectors – Automotive and Infrastructure
Shareholding Pattern
As of September 2024, the shareholding pattern includes promoters holding a major share of 77.99 percent stake in Bansal Wire Industries, Foreign Institutional Investors (FII) holding around 2.91 percent, Domestic Institutional investors (DII) standing at 14.92 percent, and public holdings standing at 4.18 percent.
About the company
Bansal Wire Industries Limited which was established in 1985, is a prominent manufacturer and exporter of stainless steel and carbon steel wires in India. The company operates across three main segments which include high-carbon steel wire, low-carbon steel wire, and stainless steel wire, producing over 3,000 product variations. With a production capacity of approximately 166,000 MT annually.
Bansal serves more than 5,000 customers across various industries globally. Their business model concentrates on diversification to mitigate risks and employs a cost-plus pricing strategy to adapt to material cost fluctuations.
Written by – Santhosh S
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