Debt-Free Multibagger Metal Stock Rathi Steel And Power Outperformed The Sector By 8.82%; Here’s Why

Rathi Steel And Power Ltd's share price surged 9.45 per cent and touched an intraday high of Rs 54.18 per share in Friday's trading session from its previous day's closing of Rs 49.26 apiece. The counter outperformed the sector by 8.82 per cent on Friday.

On Friday, the company said in an exchange filing, "We are pleased to inform that our steel melting unit at Ghaziabad has been declared as Pioneer Unit under "The Industrial and Service Sector Investment Policy 2004" of Govt. of Uttar Pradesh and pursuant to which we have received an amount of Rs. 4,71,47,847.12 (Rupees Four Crore Seventy-One Lac Forty-Seven Thousand Eight Hundred Forty-Seven and Paisa Twelve only) from Govt. of Uttar Pradesh as Refund against our claim of Electricity Duty Exemption".

The promoters of the company own a 40.32 per cent stake, DIIs own 2.53 per cent and the public owns a 57.15 per cent stake as of March 2024. From Rs 4.86 (52-week low) to Rs 54.18 per share, the stock gave multibagger returns of over 1,000 per cent in just 1 year.

Recently, the company reported standalone quarterly numbers with net sales at Rs 118.35 crore in March 2024 down 29.03% from Rs. 166.76 crore in March 2023. Quarterly Net Profit at Rs. 20.13 crore in March 2024 up 313.24% from Rs. 4.87 crore in March 2023. EBITDA stands at Rs. 4.12 crore in March 2024 down 58.13% from Rs. 9.84 crore in March 2023. Rathi Steel EPS has decreased to Rs. 2.37 in March 2024 from Rs. 25.58 in March 2023.

Earlier, the company informed exchanges that it had commenced work on a cost optimisation project. "This is to inform that the Company has commenced implementing Cost Optimisation Project. Almost all major equipment(s) related to the project have already been received at the site / expected to be received soon. The project involves synchronising the steel casting and rolling process. Once implemented and stabilised, the said project is expected to result in net savings of fuel and yield. It will also enhance sustainability by reducing Carbon Foot Print," the company said in a release.

Incorporated in 1971, Rathi Steel And Power Ltd is in the business of Steel and Steel related products. According to the information available on the trading website Screener, the company has reduced debt and is almost debt-free now.

Rathi became debt-free by March 2024. To fuel this growth and improve operations, they secured funds through preferential allotment and Kotak Mahindra Bank, which were used to repay expensive debt, expand operations, and modernize projects. Strategically, Rathi shifted focus towards high-margin value-added stainless-steel products, using internal funds to boost production capacity at their Ghaziabad plant. Additionally, they implemented cost-cutting initiatives and optimized their product mix to further increase the share of these valuable products.