Multibagger Stock: Rajratan Global Wire generated over 300% returns in 3 years, up 1780% in less than 4 years

The shares, which were valued at ₹156.70 apiece three years ago, are now trading at ₹638, resulting in a massive gain of 308%. They delivered even more stellar performance, as they skyrocketed 1780% since May 2020. Between May 2021 and September 2022, the stock saw a one-way rally, resulting in a 500% jump. 

Looking at the stock’s yearly performance, it experienced a remarkable surge of 355% in CY21, followed by another impressive increase of 122% in CY22. However, it concluded CY23 with a decline of 12.56% as investors engaged in profit booking.

Also Read: D-Street Record: BSE-listed companies reach ₹400 lakh crore market cap for first time

Rajratan Global Wire is one of the world’s leading bead wire manufacturers. It boasts a robust presence in supplying bead wire to esteemed clientele worldwide. Its operational capacity stands at 72,000 TPA (tonnes per annum) in India, with an additional 60,000 TPA capacity in Thailand. Furthermore, it has established a greenfield unit in Chennai, equipped with a capacity of 60,000 TPA.

A noteworthy distinction is that the company is the sole bead wire manufacturer in Thailand. Among its prominent clients are industry giants like Bridgestone, CEAT, Michelin, Yokohama, Apollo Tyres, and BKT, as per the company’s recent exchange filing. 

Riding the Wave

Over recent years, there has been a substantial surge in vehicle demand in India, driven by factors such as increased economic activity, growth in the working population, and evolving consumer preferences favoring vehicle ownership.

Also Read: 24 stocks in Nifty Microcap index delivered gains between 200% and 470% in last 1 year; check full list

In the fiscal year 2023–24, passenger vehicle sales in India reached record levels, exceeding 42 lakh units, particularly driven by robust growth in the sports utility vehicle (SUV) segment.

Concurrently, two-wheeler sales also witnessed a significant uptick, recording a 9% year-on-year increase, attributed to factors like expanded model availability, positive market sentiment, and the rural market’s recovery post COVID-19.

Moreover, regulatory initiatives such as the phasing out of old vehicles and the non-renewal of registration for 15-year-old government vehicles have stimulated demand for new vehicles. This trend has resulted in increased vehicle sales and subsequently heightened demand for tyres, which has benefited the company and other tyre manufacturers in the country.

Also Read: Stock to buy before Q4 results 2024: TCS share price on cusp of breakout. Should you buy?

Financials and Outlook

Looking at the company’s financials, the company reported a 16.5% jump in its consolidated revenue at ₹233 crore in Q3 FY24, while the profit after tax came in at ₹20 crore as compared to ₹22 crore reported in the same period last year. The company derived 59% of its revenue from operations in India during Q3 and the remaining 41% from operations in Thailand.

Going forward, the Indian government’s emphasis on growing output, expansion and modernisation of the road networks, and various initiatives like PLI schemes, Make in India, and Atmanirbhar Bharat are expected to directly or indirectly boost the demand and consumption of tyres.

Also Read: Stocks to Buy: Titan , ITC, L&T, Zomato are among 10 large cap picks by Motilal Oswal Financial Services.

Disclaimer: We advise investors to check with certified experts before making any investment decisions.

Milestone Alert!
Livemint tops charts as the fastest growing news website in the world 🌏 Click here to know more.

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it’s all here, just a click away! Login Now!

Published: 08 Apr 2024, 03:42 PM IST