[ad_1]
Shares of Rajratan Global Wire hit a record high of Rs 847 as the auto components maker’s scrip rallied 16 per cent on the BSE in Thursday’s trade. In the past two weeks, it has zoomed 48 per cent on a strong business outlook. The stock today surpassed its previous high of Rs 799.15 touched on April 29, 2022.
At 10:36 am; the stock erased its intra-day gain and was up 9 per cent at Rs 795, as compared to a 0.77 per cent rise in the S&P BSE Sensex. A combined around 220,000 shares had changed hands on the NSE and BSE.
Rajratan Global Wire, one of the largest manufacturers of bead wire in India, is a tyre auxiliary that makes bead wire that is a vital component for the production of tyres. Based in Pithampur near Indore in Madhya Pradesh, its manufacturing facility in India has a production capacity of 72,000 TPA.
It also owns another unit in Thailand, with a production capacity of 40,000 TPA. The company is set to expand its bead wire capacity in Thailand to 60,000 TPA. The company is also setting up a 60,000 TPA greenfield unit for manufacturing tyre bead wire in Chennai, Tamil Nadu. As tyre OEMs look to set up base in Thailand, the structural shift will increase demand in the country and increase its market share to nearly 40 per cent.
Rajratan recorded a robust performance in FY22 with its consolidated net profit having more-than-doubled to Rs 124.33 crore from Rs 53.13 crore in FY21. The company’s revenue from operations grew 63 per cent to Rs 893 crore against Rs 547 crore in previous fiscal.
Rajratan is the sole supplier of bead wire to some of the leading companies in the tyre industry and expects to further improve its market share in the Indian market. Besides, the government has banned tyre imports since June 2020 while major tyre companies in India are expanding their capacities to meet the excessive demand from the domestic and export markets.
The tyre bead wire market is expected to grow with increasing infrastructure (roads) activities in both developed and emerging economies is predicted to further increase the demand for automobiles (especially M&HCV for the movement of goods). However, supply chain disruptions, rising shipping costs and economic challenges continue to pose risks to the global tyre industry, Rajratan Global Wire said in its FY22 annual report.
China has withdrawn export rebate of 13 per cent on value added steel products. This offers an opportunity for players like Rajratan to attract global customers, especially from Asian markets. As per current estimates, around US$8-10 billion of local and foreign investment is expected in the sector by 2023. This, in turn, is likely to boost the growth of the tyre industry, the company said.
Dear Reader,
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.
Digital Editor
[ad_2]
Source link
