Rolex Rings is a small-cap auto ancillary stock with a market capitalization of ₹5,036.5 crore. The company is engaged in manufacturing and selling of hot rolled forged, and machined bearing rings and automotive components. It is one of the top five forging companies in India.
The stock made its debut on the Indian stock exchanges on August 9, 2021. The auto ancillary had mopped up ₹731 crore through its IPO. The public offer receives a tremendous response from investors, as it is subscribed to 130 times.
The stock made a strong entry on the exchanges when it was listed at a premium of 38.77% at ₹1,249 apiece over the IPO price of ₹900 and closed the first day at ₹1,166, a 29.6% premium over the issue price.
Within a year of its listing, the stock rose by 54.53%, to ₹1,803, and maintained the same trend to hit an all-time high of ₹2,198.8 apiece in October of this year. At the current market price of ₹1,845 apiece, the stock was trading 105.5% higher than its issue price.
YTD, the stock has risen from ₹1,162 to ₹1,845, giving its shareholders a return of almost 58.77%. The BSE small-cap index fell 0.10% during the same time frame.
Meanwhile, the DIIs' stake in the company shot up aggressively in the last one year, from 17.9% in Q2 FY22 to 32.7% in Q2 FY23. The majority of the increase happened in the most recent quarter. In Q1 FY23, the MF stake stood at 22.4%.
Among some key domestic institutional investors, ICICI Prudential Small Cap Fund raised its stake in the company to 6.95% in Q2 FY23 from 5.39% in the preceding quarter. Similarly, Axis Mutual Fund increased its stake to 4.93% in the September quarter, up from 4.13% in the first quarter of FY23, Trendlyne data showed.
The promoters and foreign institutional investors own 57.6% and 3.2%, respectively. While institutional investors continue to bet on the company, general shareholders have trimmed their stake to 6.5% in Q2 FY23 from 20.4% in the September 2021 quarter.
On the financial side, the net profit of the company has been growing consistently for the last six quarters. In the recent September quarter, the company reported its highest-ever net profit of ₹49.2 crore, compared to ₹32.7 crore in the corresponding quarter of the last fiscal.
The company's total revenue from operations increased by nearly 13.76% to ₹295.1 crore in the September-end quarter of FY23, compared to ₹259.4 crore in the same period last year.
Further, the company’s EBITDA grew almost 11.50% to ₹63.7 crore in Q2FY23 as against ₹57.1 crore in the year-ago quarter. While the EBITDA margin rose marginally to 21.98% from 21.52% in Q2 FY22,
The company's EPS also improved to ₹61.6 in Q2 FY23 from ₹45.8 in the year ago quarter. The EPS during the preceding quarter came in at ₹55.5. For FY22, the company's Return on Equity (ROE) and RoCE jumped to 24.20% and 33.17%, respectively.
An average of 01 analysts polled by MintGenie have a 'buy' call on the stock.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of MintGenie.
