Amitabh Bachchan makes 5x return on this smallcap stock in 5 years!

Bollywood actor Amitabh Bachchan made enormous money in an NSE-listed smallcap firm that is engaged in the business of wire manufacturing. Data available with Ace Equity suggests Amitabh Harivansh Rai Bachchan, also known as Big B, has been holding 3,32,800 shares, or a 2.45 per cent stake, in this company since September 2018. This is DP Wires.

Share price of the wiring company has jumped 4.87 times, or 387 per cent, to Rs 360.35 on March 1, 2023, against Rs 74 on September 3, 2018. With the smart moves in its shares, the market capitalisation of DP Wires soared to Rs 488.92 crore now from Rs 100.40 crore at September 2018 levels. The scrip scaled its record high of Rs 502.80 on September 20, 2022. Here is all you need to know about DP Wires:

Business and background
The Madhya Pradesh-based company is engaged in manufacturing and supply of steel wires and plastic films that find its application in industries like oil and gas, power, environment, civil, energy, automobile and infrastructure.
Plastic products that the company manufactures have been used in lining of canals, landfills, highway and road constructions, ponds, tanks, water reservoirs, mining and solution ponds and for corrosion resistant on steel tanks and wire products find application in construction, bridges, oil & gas, infrastructure.

Shareholding pattern

Overall, promoters held a 70.40 per cent stake in the company as of December 31, 2022. Retail investors and high net-worth individuals held 8.88 per cent and 8.85 per cent stakes, respectively, in DP Wires.

Report card
Net sales of the company increased 25.70 per cent compounded annually to Rs 613.24 crore in FY22 from Rs 195.38 crore in FY2017.

On the other hand, net profit witnessed a compounded annual growth rate of 42.05 per cent during the same period. The bottom line of the firm jumped to Rs 29.05 crore from 5.02 crore in the period mentioned.

For the nine months ended December 31, 2022, net sales of the company jumped 90.54 per cent to Rs 828.67 crore. Net profit for the same period grew 17.61 per cent to Rs 25.95 crore.

Annualised earnings per share of the company also surged to Rs 27.44 in Q3FY23 from Rs 8.88 in the fourth quarter of FY19. The company had ‘nil’ net debt as of December 2022, according to its investor presentation.

Outlook

In its latest investor presentation, DP Wires said that the business environment remains challenging and it is expected to peak as inflationary pressures ease out globally.

“In India, the domestic demand for steel continues to remain firm. A further boost is provided by the increased budgetary allocation by 33 per cent to Rs 10 lakh crore towards infrastructure, in the Union Budget 2023-24. Also, the company’s wide range of value-added products, increased production capacity, a solid customer base, and a strong balance sheet, we endeavour to anticipate maintaining the growth momentum going forward,” the company said.

 

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