Smallcap iron and steel products maker, Godawari Power & Ispat is planning to consider buyback in the coming days. Following this, investors made massive buying of Godawari Ispat shares so much so that the smallcap touched a new 52-week high and gained more than 11% in a single day.
Godawari Power & Ispat Share Price:
The stock zoomed by 11.40% to hit a new 52-week high of Rs 1,086.05 apiece on BSE in the early trade of June 10. At the time of writing, the stock surged by nearly 8% to trade at Rs 1049.25 apiece on BSE with a market cap of Rs 14,238.20 crore.
The stock rallied by nearly 193% from its 52-week low of Rs 370.85 apiece. YTD, the stock is up by 35%. In 5 years, the stock skyrocketed by 1,780%.
Godawari Power & Ispat Buyback:
In its regulatory filing, Godawari Power & Ispat said that ", a meeting of the Board of Directors of the Company is scheduled to be held on Saturday, June 15, 2024, inter alia, to consider a proposal for buyback of fully paid up equity shares of the Company of face value of Rs 5 each as well as matters related/incidental thereto, by the applicable provisions under the Companies Act, 2013 (including the rules and regulations framed thereunder), the Securities and Exchange Board of India (Buy-back of Securities) Regulations, 20189 as amended, and other applicable laws.
A buyback allows companies to invest in themselves. By reducing the number of shares outstanding on the market, buybacks increase the proportion of shares a company owns. Buybacks can be carried out in two ways:
Some of the reasons behind buyback are --- to improve earnings per share; improve return on capital, return on net worth and enhance the long-term shareholder value; provide an additional exit route to shareholders when shares are undervalued or are thinly traded; enhance consolidation of stake in the company; prevent unwelcome takeover bids; return surplus cash to shareholders; achieve optimum capital structure; support share price during periods of sluggish market conditions; and service the equity more efficiently.
Godawari Power & Ispat Corporate Actions:
So far, as per Trendlyne data, the stock has delivered up to 18 dividends since September 2006. In the last year, the company paid dividends up to Rs 4 per share, while the payout was at Rs 8.50 per share in 2022.
That's not all, Godawari Power has also carried stock split and bonus issues after the Covid pandemic. In October 2021, the company distributed bonus issues in the ratio of 1:1, while carried stock split in the ratio of 1:2 where the face value of Rs 10 was split to Rs 5 each.
BUY Godawari Power & Ispat Stock?
As per Trendlyne data, the consensus recommendation from 1 analyst for Godawari Power & Ispat Ltd. is STRONG BUY. EPS is expected to grow by 29.4% in FY25. The 1-year average target price in the stock is of Rs1,250 apiece, hinting at a potential of 19% upside ahead.
About Godawari Power & Ispat:
Godawari Power & Ispat Limited is a fully integrated steel company that operates across the entire steel value chain. The Company's operations span from iron ore extraction from two captive iron ore mines to the production of iron ore pellets and high-value steel products. It is a prominent player in the Indian steel industry, renowned for its integrated steel plants and robust manufacturing capabilities.
With a strong focus on efficiency and sustainability, the company has carved a niche for itself in the market. Leveraging state-of-the-art technology and a skilled workforce, Godawari Power & Ispat Limited consistently delivers high-quality steel products that meet the diverse needs of its customers across various sectors.
FY24 net sales were at Rs 5,455 crore, down by 5% YoY, while EBITDA surged by 14% YoY to Rs 1,328 crore, and PAT also registered growth of 18% YoY to Rs 937 crore.
Godawari is mulling a strong Capex of more than doubling the capacities of Ari Dongri Iron Ore Mining, Pellets and Integrated Steel Plant is in place. Environment approval for Pellet Plant was received and the orders for major equipment have already been placed.
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