Tanfac Industries, a small-cap stock, has demonstrated remarkable performance over the past five years, generating substantial returns for its investors. During this period, the stock witnessed a stellar surge, soaring from ₹101.50 apiece to a whopping high of ₹1,852, reflecting a remarkable increase of 1724%.
An investment of ₹1 lakh into the stock would have turned into a staggering ₹18.25 lakh. Such exponential growth has positioned Tanfac Industries as one of the standout performers in the equity markets.
The stock has consistently delivered impressive gains over the last four years. In the year 2023, it has already provided a staggering return of 100%. Similarly, in the previous year, it delivered a solid return of 60%, and in the year before that, it recorded a substantial rally of 202%. In CY20, it rewarded shareholders with 63% gains.
During the period from CY15 to CY22, the stock recorded positive growth every year except for CY19. What's even more impressive is that in each of those years, the stock ended with a rally of over 50%.
Tanfac Industries Ltd. is a joint-sector company promoted by Anupam Rasayan India Limited and the Tamil Nadu Industrial Development Corporation (TIDCO). The company is one of India’s largest suppliers of fluorine chemicals.
Anupam Rasayan India, a specialty chemicals manufacturer, acquired 24.96% from Birla Group Holdings Private Limited in March 2022. This strategic move was aimed at achieving backward integration, enabling Anupam Rasayan to procure essential input materials for its products from TIL (the acquired entity).
On the fundamental front, the company has been delivering consistent growth in its net profit. In the recent March quarter, it posted a 215% YoY jump in its net profit to ₹22.4 crore, ending FY23 with a total net profit of ₹56 crore, a growth of 5.65% over FY22's net profit of ₹53 crore.
Its revenue from operations during Q4 FY23 rose by 78.30% to ₹121.8 crore. Sequentially, the revenues were up by 22.16%. Overall, the company ended FY23 with a 17.20% growth in revenues.
In Q4 FY22, the company witnessed sharp growth in EBITDA, which increased from ₹10 crore to ₹26 crore. Additionally, the EBITDA margin expanded by 700 basis points, reaching 22%.
Further, the EPS (Earnings Per Share) improved to ₹22.44 from ₹7.08 in the year-ago quarter. At the prevailing price, the stock trades at a price-to-earnings multiple of 32.9x, which is much lower compared to the industry P/E of 47.6x.
In addition, the company has zero debt, Trendlyne data showed, while it had an ROE and RoCE of 30.45% and 40.49%, respectively, in FY23.
The company spends less of its earnings on dividend payments, as the payout ratio stands at 5.92% in FY23. In the past one year, the company declared an equity dividend amounting to ₹5.50 apiece.
Taking the current market price into account, the dividend yield stands at 0.30%. In addition, the stock is trading at 10 times of its book value of ₹184.75.
As of Q4FY3 the promoters hold 51.8% of the shares in the company, while general shareholders own a 48.1% stake, according to Trendlyne.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of MintGenie.