This smallcap stock hit new high after gap of 15 years; up 47% in 1 month

Shares of Ashapura Minechem were locked in the 5 per cent upper circuit at Rs 460.25 on the BSE on Thursday at 09:58 AM. In the process, the stock has hit a record high after a gap of 15 years.

The stock of industrial minerals company surpassed its previous high of Rs 445 touched in January 2008. In past one month, the stock has zoomed 47 per cent, as compared to 6.7 per cent rise in the S&P BSE Sensex. Thus far in the calendar year 2023, it has skyrocketed 370 per cent, as against 13.5 per cent rally in the benchmark index.

Ashapura Minechem is a leading multi-mineral solutions provider with a global footprint. It is among the top three global producers of bentonite with over 60 million tons of quality sodium and calcium bentonite reserves across the country. The company has activation, milling and processing plants in several locations in India. It has a wholly owned subsidiary and offices in the UAE & China.

According to the company’s management the mining & minerals industry in India is witnessing robust demand growth from the export markets as global decarbonizing efforts right from electric vehicles to solar panels as well as unrest in various parts of the world make India a viable option for the world market.

The orders received for Bauxite and Iron Ore from Chinese and Indian players during September quarter (Q2FY24) is a testimony to company’s strong capabilities and export quality material. The management hopes to maintain the strong growth momentum for rest of the year & sustain margins with robust order flow & realizations.

Meanwhile, for Q2FY24, Ashapura Minechem had reported robust profit after tax of Rs 58.16 crore, compared to Rs 5.75 crore in a year ago quarter. Revenue during the quarter more than doubled to Rs 575.78 crore from Rs 225.55 crore in Q2FY23.

A protracted rainy season in Guinea during Q2 has led to relatively muted Bauxite exports. The second half of financial year 2023-24 (FY24) appears to be in line with the annual business plan, the company said.

The increasing use of aluminium in global decarbonizing efforts, right from electric vehicles, solar panels bode well for the company’s Bauxite operations. Ukraine has been a large global exporter of white performance minerals; the continuing conflict in the region has seen India emerge as an alternate strategic supplier of quality Kaolin products.

Ashapura in its FY23 annual report said, the outlook for FY24 is set to be positive on account of two more Bauxite mines becoming operational in Guinea from the second half of the financial year, which would enable the company to export higher volumes.

The company shall continue its constant endeavour to move up the value chain by introducing a new line of animal feed products which are value added from quality Bentonite. Furthermore, the company’s Kaolin products are consolidating its position in the overseas market making up for the supply that has been lost because of the turmoil in Ukraine, the company said.