4:1 bonus shares & Rs 2,326 crore order book: This multibagger engineering company is into expansion of business with acquisition of EMC Ltd; details inside!

The stock gave multibagger returns of 130 per cent in 1 year and a whopping 890 per cent in 5 years.

Salasar Techno Engineering Ltd (STEL), a one-stop engineering and infrastructure solution provider specializing in turnkey EPC services for the Railway and Power sectors, as well as designing and manufacturing telecom towers, monopoles, and other heavy steel structures, has completed the payment of the remaining balance of Rs 168 crore for the acquisition of EMC Ltd. (formerly known as Electrical Manufacturing Company Limited). This successful acquisition marks a significant milestone in Salasar's ongoing strategy to expand its market presence and capabilities.

STEL, established in 2006, acts as a single source for customized steel infrastructure solutions in India. They offer comprehensive services encompassing engineering, design, fabrication, galvanization, and installation. Their product range includes various towers (telecom, power transmission, lighting, etc.), substations, solar structures, railway electrification components, bridges, and custom steel structures. Additionally, STEL acts as an EPC contractor, undertaking complete project management for rural electrification, power lines, and solar plants.

The company has an order book of Rs 2,326 crore as of December 31, 2023, out of which Rs 1,879 crore are domestic EPC orders, Rs 221 are international EPC orders, orders under heavy steel structure division are worth Rs 110.7 crore, Monopoles orders are worth Rs 72.1 crore and exports orders (telecom towers and poles) are worth Rs 43.2 crore.  

Salasar Techno Engineering Ltd (STEL) has secured two major contracts. In a joint venture with Rail Vikas Nigam Ltd (RVNL) where STEL holds a 49 per cent stake, they won a Rs 173.99 crore project from Madhya Pradesh Power Transmission Company Limited (MPPTCL). Additionally, STEL secured a significant Rs 1,033.78 crore contract from Tamil Nadu Generation and Distribution Corporation Limited (TANGEDCO).

According to Quarterly Results (Q3FY24), the net sales increased by 26.32 per cent to Rs 304.35 crore and net profit increased by 56.75 per cent to Rs 167.10 crore compared to Q3FY23 while in nine-month results (9MFY24), the net sales increased by 18.43 per cent to Rs 841.10 crore and net profit increased by 40.89 per cent to Rs 35.96 crore compared to 9MFY23. As of April 2024, promoters own 58.76 per cent, FIIs own 6.27 per cent and the public owns 34.95 per cent.

The company issued bonus shares in a 4:1 ratio to its shareholders on February 1, 2024 (ex-date). This means that for every one share a shareholder held, they received four additional shares. Additionally, the company distributed a dividend of Rs 0.10 per share on September 15, 2023 (ex-date). The stock gave multibagger returns of 130 per cent in 1 year and a whopping 890 per cent in 5 years. Investors should keep an eye on this Small-Cap stock.

Disclaimer: The article is for informational purposes only and not investment advice.