Bajaj Steel shares hit new high; stock zooms 125% in a month

Shares of Bajaj Steel Industries hit a new high of Rs 1,432, ralling 10 per cent on the BSE in the intra-day trade on Friday, in an otherwise weak market. In comparison, the S&P BSE Sensex was down 0.36 per cent at 52,433 points at 10:18 am.

Bajaj Steel is engaged in the manufacture and sale of machinery for cotton ginning and pressing, used for preparing textile fabrics in India and abroad. It is the only company in the world that produces machineries for all cotton ginning technologies.

BSL operates in two business segments: steel division and plastics division. The products manufactured by the company include ginning machine cotton ball opener, cotton baling press, cotton pre-cleaner, lint cleaner, auto feeder, cotton seed delinting machine, decorticator hull beater, cotton seed cleaner, and linter cleaner.

In the past one month, the stock has zoomed 125 per cent as compared to a 0.81 per cent rise in the S&P BSE Sensex. Meanwhile, in the past one year, it has skyrocketed 1,211 per cent as against a 43 per cent rally in the benchmark index. The company is listed only on the BSE.

In the past eight trading days, the market price of Bajaj Steel has surged 85 per cent after the company reported a strong set of numbers for the quarter ended March 2021 (Q4FY21). The company's consolidated net profit jumped 69 per cent year-on-year (YoY) at Rs 29.80 crore on back of lower raw material cost. On a sequential basis, the company's profit rose nearly 6-fold from Rs 5.04 crore in December 2020 quarter. Consolidated revenues, however, declined 22 per cent YoY at Rs 124.67 crore.

For the entire financial year 2020-21 (FY21), Bajaj Steel’s consolidated net profit grew 178 per cent YoY at Rs 65.60 crore from Rs 23.64 crore in FY20. Revenues were up 23 per cent at Rs 511 crore from Rs 415 crore in the previous fiscal.

That said, Bajaj Steel has a low equity base of 5.2 million shares with promoters holding 42.74 per cent of the shares. Besides, individual shareholders have 34.86 per cent stake and others including Bajaj Exports Private Limited (8.22 per cent), Bajaj Global (2.60 per cent) collectively held 22.40 per cent stake at the end of March 2021 quarter, shareholding pattern data shows.