A leading steel manufacturer has demonstrated remarkable momentum in securing substantial orders, with recent acquisitions totalling Rs. 10.59 crore for specialised GP pipes and tubes. This development is part of a larger success story, as the company has amassed orders worth Rs. 18 crore in just 15 days, signalling strong market demand.
Share Price Movement
The share price of Newmalayalam Steel Limited went up 5.8 percent to Rs. 55.95 per share on Monday, an increase from its previous close of Rs. 52.85 per share. The market capitalisation now stands at approximately Rs. 95.08 crore as of January 13, 2025.
What driving price?
In the last 15 days, NewMalayalam Steel has secured written orders totalling an impressive Rs. 18 Cr., including a recent order for 1500 MT of Demac GP Pipes and Tubes valued at Rs. 10.59 Cr. and a prior order for 1025 MT of Demac GP Pipes and Tubes valued at Rs. 7.31 Cr.
Financial Highlights
According to its recent filing, in the year ending March 2024, the company’s revenue for FY24 stood at Rs. 300 crore, reflecting a decline of 15.25% from Rs. 354 crore in FY23. Similarly, profit decreased by 33.33%, dropping from Rs. 6 crore in FY23 to Rs. 4 crore in FY24.
The company presents a mixed financial picture. While experiencing a significant decline in sales growth at -20%, the company managed to achieve an impressive compounded profit growth of 190%. The stock price has performed well with a 55% CAGR over the five-year period. However, the return on equity has remained relatively stagnant at just 1%, suggesting potential inefficiencies in converting profits into shareholder value.
The average price-to-earnings (P/E) ratio in the steel industry is 26.7, which is more than Newmalayalam Steel’s current P/E ratio of 22.08.
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Market Outlook
India’s consumer market is set for strong growth, driven by a 6.5% economic expansion in FY 2024–25, a booming middle class, and rapid urbanisation. E-commerce is flourishing, with projected revenues of $200 billion by 2026, fuelled by growing internet penetration.
Rising demand for organic products and branded goods reflects changing consumer preferences. Government initiatives like ‘Make in India’ and ‘Digital India’ further support manufacturing, digital transactions, and organised retail. Companies innovating to meet evolving needs will excel in this dynamic landscape.
Shareholding Pattern
As of the September 2024 shareholding pattern, Newmalayalam Steel Limited is primarily held by the promoters at 19.43 percent, foreign institutional investors hold 0.11 percent, and the public with 80.47 percent.
About Company
Newmalayalam Steel Limited, established in 2017 in Thrissur, Kerala, produces high-quality galvanised pipes, tubes, and sheets for Kerala’s construction industry. Led by Managing Director Varghese Davis, the company plans to expand through technological upgrades and solar power diversification. Despite challenges like supply chain issues, it continues to innovate and grow.
Written By Fazal Ul Vahab C H
Disclaimer
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