Shares of small-cap company K&R Rail Engineering are seeing a rise of 16 percent and the stock price has reached ₹ 454 per share. This stock has given multibagger returns of 1,100 percent in 2 years. Let us know what is the reason for the rise in this stock?
Why did the stock run away?
First of all, you should know that 52 week low of K&R Rail Engineering is ₹391.20 and 52 week high is ₹800. The sudden surge in the stock came as the company’s management said that they have approved the allotment of 96,00,000 equity shares. The face value of which is ₹10 per share, which are redeemed after conversion of 96,00,000 7 per cent convertible redeem preference shares, having an aggregate value of ₹960,00,000 and will be allotted to the promoter and promoter group.
order book
Firstly, K&R Rail Engineering Limited has secured a work order from Fomento Resources Private Limited, located in Panaji, Goa, for design, consultancy and railway approval (Phase I) for a railway siding facility, followed by EPC basis. The execution (Phase II) will be done at Kalya Station, Hubballi Division of South Western Railway. The value of this domestic order is ₹110 crore and it is to be completed within 18 months.
stock split
Apart from this, the Board of Directors of the company has announced split of shares in the ratio of 10:1. This means that 1 equity share, having face value of ₹10, will be divided into 10 equity shares. The company says that the record date of this split of equity shares will be informed in due course.
results
According to the quarterly results, the company reported net sales of ₹142.23 crore and net profit of ₹3.18 crore in Q1FY25, compared to net sales of ₹200.10 crore and net profit of ₹5.08 crore in Q1FY24. In the annual results, net sales grew by 70 per cent to ₹662.41 crore in FY24, while net profit grew by 24 per cent to ₹7.79 crore, compared to FY23.
K&R Rail Engineering Ltd is engaged in the business of private railway siding. The company’s market cap is ₹943 crore and its profit growth has been 204 percent CAGR in the last 3 years.