This Ductile Iron maker stock grew 25 times in FY2023-24 through Value Added product lines. Currently it’s profits are…

Till 2021 this ductile iron Product maker was struggling with gross margins. Reasons being structural and product related. Margins were low single dijits and sometimes even negative even at the gross level. But since 2022 Jai Balaji seems to have gotten its act together.

Iron and steel is typically a commoditized industry and without value addition. You are at the mercy of the supply-demand dynamics to just about sail you across. Lack of margins meant the JBIL went into negative reserves territory in 2015 and remained there till 2022.

Post that the story if JBIL has been that of a remarkable turn around. The company has raised capital through warrants and QIBs, it has mitigated debt coverage through repayments and refinancing, and even the promoters have raised their stake.

Shockingly Good Numbers!

The cash cycle has has reduced from 100 days to mere 7 days meaning working capital is getting converted into revenues in mere 7 days. The company has focused on value added products thereby catapulting its meagre margins to a whooping net profit of 594 Cr in last 4 reported quarters taken together. Revenues have taken off from 2785 Cr in 2021 to 6125 Cr in 2023. Gross margins have grown nearly 8 fold from 96 Cr in 2021 to 729 Cr in last 4 reported quarters.

Reserves have recovered to a positive territory from being negative (1844 Cr) in 2021 to north of positive 800 Cr in 2023.

Capex Plans:

Heartening to see that management has taken the accountable positioning and come out with concalls, promoter stake increments and defined projections both in terms of capacity and capital structure changes. The company is planning to invest 1000 Cr in next three years out of which 380 Cr has aleady been infused. Capacity expansions include (add from presentation)

This stock has clearly turned out to be a multibagger for those who detected the potential and probability of this turn around a year or more back. We are constantly in look out for and sharing with our clients similar stocks which give a scope of multibagger returns. Subscribe to our multibagger portfolio which provides you 30++ stocks with potential multibagger returns.

Happy investing.