scorecardresearchMultibagger alert! This stock more than doubled investor wealth in the

Multibagger alert! This stock more than doubled investor wealth in the last 1 year

Updated: 14 Jul 2022, 10:44 AM IST
TL;DR.

The stock has risen 127 percent in the last 1 year and 110 percent in 2022 so far. It has been a boon for long-term investors, rising 1,628 percent in the past 5 years.

The stock has risen 127 percent in the last 1 year and 110 percent in 2022 so far. It has been a boon for long-term investors, rising 1,628 percent in the past 5 years.

The stock has risen 127 percent in the last 1 year and 110 percent in 2022 so far. It has been a boon for long-term investors, rising 1,628 percent in the past 5 years.

Shares of auto components maker Rajratan Global Wire have given robust returns to its investors, more than doubling investor wealth in the past 1 year.

The stock has risen 127 percent in the last 1 year and 110 percent in 2022 so far. It has been a boon for long-term investors, rising 1,628 percent in the past 5 years.

Last week, the scrip hit its 52-week high of 847 on the back of a strong business outlook. The company is one of the leading manufacturers and suppliers of bead wire in India and also the only manufacturer of bead wire in Thailand. It has a 45 percent market share in India and a 23 percent market share in Thailand.

It offers high carbon steel wires that are used in mechanical springs, high-performance springs, beddings and seating, wire ropes and cables, conveyor belts, automotive cables, steel fibers, and cut wire shots for shot blasting and pinning applications.

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It reported robust earnings for FY22 with its net profit more than doubling to 124.33 crore as against 53.13 crore in FY21. Revenue from operations in FY22 also grew 63 percent to 893 crore versus 547 crore in the previous fiscal.

In a report, B&K Securities stated that both in India and Thailand demand for tyre bead wire (TBW) is experiencing huge tailwinds backed by large capacity additions by the tyre companies, declining competition and favorable macros.

Hence, the firm is well poised to gain further market share to over 60 percent in India and over 40 percent in Thailand by FY24E. This will drive the company's strong consolidated volume CAGR of 25 percent over FY21-24E supported by doubling the capacity in India and implementing a 50 percent increase in Thailand Capacity, it added.

The brokerage expects the company to fill the expanded capacity in Thailand & India by FY25E and FY26E respectively.

"A focused business with high entry barriers and reducing competitive pressure is making the business model resilient against Tyre OEM cycle. EBITDA margin improved from 9.7 percent in FY18 to 16.9 percent in FY21. RGW already improved its margin to 20.5 percent in H1FY22 and we expect this improved margin to sustain on a conservative basis," said the brokerage.

It forecasts a strong earnings CAGR of 40 percent over FY21-FY24E and ROCE is expected to reach 28.2 percent in FY24E for the firm as against 22.4 percent reported in FY21.

It also noted that the stock is trading at attractive valuations. B&K expects earnings multiple to re-rate to 22x FY24E supported by expected strong earnings growth.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of MintGenie.

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First Published: 14 Jul 2022, 10:44 AM IST