Shares of Responsive Industries, a leading manufacturer of resilient vinyl flooring and synthetic leather, spiked nearly 20% in Thursday's trade to hit an all-time high of ₹307.5 apiece after the company, in an exchange filing on Wednesday, said that it secured a contract for the Garib Rath initiative from the Indian Railways. Prior to this, the company secured orders from Indian Railways for the ‘Vande Bharat’ Project.
Earlier in August, the company announced the successful acquisition of the Vaitarna Tunnel project contract under the prestigious Mumbai-Delhi Freight Corridor initiative of Indian Railways.
The Mumbai-Delhi Freight Corridor Project is a major undertaking by the Indian Railways aimed at improving the freight transport network across the nation. Responsive Industries’ waterproofing membranes will contribute to the long-term reliability and sustainability of the Vaitarna Tunnel, the company said in a regulatory filing.
Responsive Industries is a leading manufacturer of PVC products that operates across five verticals: luxury vinyl planks, sheet vinyl flooring, synthetic leather, synthetic ropes, and waterproof membrane.
The company's diverse product range serves clients in various sectors and regions, including healthcare, hospitality, transportation, retail, sports infrastructure, and real estate.
It is the only Indian producer of healthcare sheet vinyl with established specifications in government and private hospitals, clinics, and medical facilities. It also holds primary supplier status to Indian Railways for synthetic leather and resilient sheet vinyl, along with serving the motor coach industry. Key institutional customers include Tata Motors, Eicher Motors, JBM Auto, Ashok Leyland, and Olectra Greentech.
One of the company's products is Luxury Vinyl Plank (LVP), a 100% waterproof flooring solution that mimics the appearance of wood and tile while replacing traditional materials like laminate, hardwoods, engineered woods, carpet, and ceramic tiles.
According to company, the global vinyl flooring market is valued at US$45.1 billion in 2022 and growing at a CAGR of 12%, is projected to reach US$65.6 billion by 2027. This growth is attributed to factors such as increasing consumer demand for residential floorings, rising purchasing power, technological advancements, and the cost-effectiveness and longevity of vinyl flooring.
Amid this backdrop, the company aims to capture a 3% global market share, targeting revenue potential growth from US $70 million in FY22 to US$185 million by 2027.
Financial Performance
In the quarter ending June, the company reported revenue from operations of ₹263 crore, marking a 16% improvement compared to the ₹227 crore recorded in the same period last year. The operating profit came in at ₹48 crore in Q1FY24 from ₹18 crore in Q1FY23, while the EBITDA margin expanded by 1000 basis points YoY to 18%.
The company achieved a profit after tax of ₹30 crore, a robust turnaround from a net loss of ₹9 crore reported in the corresponding period of the previous fiscal year. In the preceding March quarter, it reported a net profit of ₹23 crore.
Stock Performance
Following a lackluster performance between CY21 and CY22, resulting in nearly a 37% loss of value, the company shares made a strong comeback in the current year, delivering a remarkable return of 160%. During this period, the stock surged from ₹116 to ₹301.50 apiece.
Notably, the stock has shown consistent gains over the past five months, and in the current month alone, it has appreciated by nearly 24%. In terms of long-term performance, the stock has generated a remarkable 262% return over the last five-year period.
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