740% jump in Q3 net profit! This multibagger stock turned Rs 1 lakh to over Rs 18 lakh in just 1 year

A Rs 15,370-crore company engaged in manufacturing iron and steel products has been buzzing on Dalal Street thanks to the superlative returns it delivered in the past year. It has also seen a manifold rise in net profit for the nine months of FY24 and the December quarter. This is Jai Balaji Industries.

The company’s net profit galloped 755% year-on-year (YoY) to Rs 606.59 crore during April-December 2023. Earlier, the company posted a profit of Rs 57.83 crore and Rs 48.06 crore for the financial years ended FY23 and FY22, respectively. Before FY22, Jai Balaji Industries reported a series of losses from FY12 to FY21.

More recently, it reported a growth of 740% in its bottom line at Rs 234.60 crore for Q3. Sharing his views on the company’s growth prospects, Aditya Jajodia, Chairman and Managing Director, Jai Balaji Industries, in the latest investor presentation said that the firm faced tough challenges in the last 6-7 years, which have now been resolved with the commitment, hard work, faith and resilience of the management, business associates and stakeholders.

He added that Jai Balaji 2.0 aims to transition into a high-margin business, and the company plans to achieve the same by lowest cost capex for capacity enhancement, economies of scale, operational efficiencies and focusing on specialised products.

Meanwhile, the company is now aiming to become debt-free in the near term. Jai Balaji Industries also has a capex plan of Rs 1,000 crore, out of which Rs 380.80 crore has already been spent from internal accruals and the balance is expected to be completed in 18 to 24 months through internal accruals.

Coming to Q3 & 9MFY24 performance, Jajodia said, “I’m thrilled to report a record high performance in Q3 and 9MFY24 marked by robust financial results, strategic expansions, and unwavering commitment to operational excellence. The adjusted EBITDA and PAT for the quarter grew by 96% and 7.4 times YoY respectively. We are steadily progressing towards our aim to become net debt-free in the next 18 months. Going forward, we aim for margin expansion by increasing capacity and utilisation of value added and specialised products, cost reduction and technological upgradation leading to sustainable growth and value creation.”

The company had a net debt of Rs 566.50 crore as of December 31, 2023 against Rs 871.2 crore as of March 31, 2023. Earlier, it had a net debt of Rs 3,149.60 crore and Rs 3,407.9 crore in FY22 and FY21, respectively. The company is aiming to maintain net debt to EBITDA at around 0.6 on March 31, 2024. Promoters also raised their stake in the company to 60.02% as of December 2023 against 55.90% in December 2022.

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