Stock of this iron & steel company has zoomed over 1,000% since April

In the month of July, the stock price of Jai Balaji Industries more than doubled, zooming 106 per cent. Besides it has gained 74 per cent in August and 61 per cent in September.

Shares of Jai Balaji Industries continued their northward movement, hitting fresh multi-year high of Rs 523.95 on the BSE, as they gained 3 per cent in Thursday's intraday trade.

The stock of the smallcap iron & steel products company was quoting at its highest level since January 2008. It had hit a record high of Rs 670 on January 8, 2008. In comparison, the S&P BSE Sensex was down 0.05 per cent at 66,438 at 02:17 PM.

Currently, Jai Balaji Industries is trading under ‘T’ group segment. T group of shares are actively traded at stock exchanges like other shares but with certain restrictions. These stocks are not allowed for intraday trading. The T2T stocks can only be delivery based i.e. the buyer has to take the delivery of these shares.

Jai Balaji Industries has outperformed the market in the past four months by delivering positive returns in each month. Thus far in the month of October, the stock has rallied 19 per cent. In the month of July, the stock price of the company had more than doubled by zooming 106 per cent, followed by 74-per cent gain in August, and 61-per cent in September.

Since April, so far in the financial year 2023-24, the stock has skyrocketed 1,050 per cent from a level of Rs 45.54 at the end of March 2023.

On clarification on increase in volume, Jai Balaji Industries had, on September 7, said the increase in tire volume of the scrip of the company is purely due to market conditions and absolutely market driven.

As on August 22,2023, promoters held 60 per cent stake in Jai Balaji Industries. Of the remaining 39.98 per cent public holding, bodies corporate held 15.81 per cent holding, individual shareholders held 11.92 per cent stake, while resident individual (HUF) and Mahesh Kumar Keyal (HUF) held 5.35 per cent and 4.05 per cent stake, respectively, the shareholding pattern data shows.

Jai Balaji Industries is primarily engaged in the business of manufacturing of Iron and Steel products including Sponge Iron, Pig Iron, Ductile Iron Pipe, Ferro Chrome, Billet, TMT, Coke, and Sinter with captive power plant.

The board of directors of the company is scheduled to meet on Monday, October 16, 2023 to consider the financial results for the quarter ended September 2023 (Q2FY24).

For the June quarter (Q1-FY24), the company had reported a strong operational performance with profit after tax (PAT) jumping nearly eight-fold to Rs 170 crore as against Rs 21.82 crore in the year ago quarter.  The company surpassed its entire previous fiscal 2023 PAT of Rs 57.83 crore in the first quarter of FY24.

According to CareEdge Advisory & Research, the domestic steel demand growth is expected to be healthy at 8-10 per cent in FY24. This will be driven by an increase of 33 per cent year on year (YoY) in the government’s budgeted capex on infrastructure development and an uptick in the real estate and construction industry.

"On the other hand, exports have been increasing on a sequential basis from December 2022 onwards, post the withdrawal of the export duty on steel products and iron pellets. This is expected to result in higher export volumes in FY24. However, the operating profit margins of steel players are expected to remain under pressure in FY24 due to elevated input costs of iron ore and coking coal. International steel prices are also expected to remain range-bound in the near term," Jai Balaji Industries said in its FY23 annual report dated August 26, 2023.

The company further said the growth prospects and steel industry outlook in India is favourable. Recent changes in export taxes and import duties on steel complemented by the rising demand for affordable housing, infrastructure development and construction projects, has led to a pan-India need for steel metal. Moreover, the government’s initiative to make India self-sufficient has made room for sustainable urban development, construction of proposed logistics parks and industrial corridors – all adding to the meteoric demand for finished steel and steel as a raw material.