Bansal Wire Industries' shares rose more than 4% after Investec began covering with a "buy" rating and a target price of Rs 440 per share. Bansal Wire has carved out a place in the commoditized steel and stainless steel wire markets by supplying a diverse product line while lowering customer and industry concentration, according to the brokerage.
Bansal Wire is pursuing two extremely lucrative initiatives: expanding into steel cords and doing backward integration in stainless steel rods. Investec expects a solid 40 percent+ EBITDA CAGR over FY24-27E and a high teens post-tax return on capital employed (RoCE).
The company is now valued at 24x FY26E PE and 17x FY27E PE, both of which are regarded favorable by Investec analysts.
Bansal Wire is a stainless steel wire manufacturer whose shares launched on markets with a 39 percent premium on July 10 this year. The stock was listed on the NSE for Rs 356 against the issue price of Rs 256. The stock is presently trading about Rs 374.00, up 43% from its IPO price.
The firm has recorded an 82% year-on-year increase in net profit to Rs 31.5 crore for the fiscal first quarter ending June 30, 2024. Revenue increased 49.1 percent year on year to Rs 817 crore, while EBITDA increased by 127.4 percent to Rs 62.2 crore.
In July, there was a considerable amount of mutual fund investment in newly listed firms such as Emcure Pharmaceuticals, Bansal Wire Industries, and Akums Drugs & Pharma. Data suggest that mutual funds invested Rs 506 crore in Bansal Wire Industries.
At 9:28 a.m., Bansal Wire shares were trading 3.8 percent higher on the National Stock Exchange (NSE). The stock has increased 2.4 percent in the previous month, outperforming the Nifty's 0.3 percent gain.
