 "This smallcap stock has zoomed 109% from IPO issue price within 2 months")
Shares of Gala Precision Engineering hit a record high of Rs 1,105.45, as they surged 17 per cent on the BSE in Wednesday’s intra-day trade in an otherwise weak market. In the past three days, the stock price of this smallcap company has soared 31 per cent. It surpassed its previous high of Rs 974 on October 17, 2024. In comparison, the BSE Sensex was down 0.5 per cent at 79,980 at 01:59 PM.
The stock price of Gala Precision Engineering has more-than-doubled in less than two months. It zoomed 109 per cent against its issue price of Rs 529 per share. The company made its stock market debut on September 9, 2024.
Gala Precision Engineering is a precision component manufacturer of technical springs like disc & strip springs (DSS); coil & spiral springs (CSS) and Special Fastening Solutions (SFS). The company supplies its products to original equipment manufacturers (OEMs), Tier 1 and channel partners; used in sectors like renewable energy, including wind turbine and hydropower plants, various industrial sectors like electrical, off-highway equipment, infrastructure and general engineering, mobility segments, such as automotive and railways.
The company’s CSS products are used in commercial vehicles, passenger vehicles, railways and industrial infrastructure. They have positioned themselves as a key import substitution for European springs suppliers and multinationals looking at PLI Schemes and other incentives offered by the government.
GPEL has a strong customer base with stickiness in products as it meets stringent specifications & technical requirements, reliability in supplies, and cooperation with German and Indian institutes for new product development. Key customers include Vestas Wind Technology India Private Limited, L&T Electrical & Automation, Schneider Electric, and Brembo Brake India Private Limited.
GPEL has strengthened its core capabilities in precision engineering for a sustainable growth with innovative new product offerings developing more than 200 new products in the last few years and winning various awards and accreditations from its global OEM proving a mark fostering higher growth in the coming years with increased capacities. GPEL has a significant market share with a diverse product range and possess significant entry barriers for new players, experienced management team supported by large diverse skilled force and track record of consistent financial growth, analyst at Reliance Securities had said in IPO note.
With a global client base exceeding 175 customers and exports to over 25 countries - including major markets like Germany, Denmark, China, Italy, Brazil, the USA, Sweden, and Switzerland - the company achieved 37.53 per cent of its total sales from international markets as of March 31, 2024. The company continues to target high-value markets in Europe and the USA for further growth, said analyst at Deven Choksey Research in note.