Why Did This Ashish Kacholia Stock Hit a 20% Upper Circuit Today? Here’s Why!
Ashish Kacholia : Shares of Man Industries (India) Limited, a leading manufacturer of large-diameter pipes with a three-decade legacy in the API Pipe Industry, skyrocketed by 20% in Wednesday’s trading session. The surge left investors and market analysts curious about the factors driving this remarkable rally. Let’s dive into the reasons behind this sharp upward movement.
Stock Performance & Price Movement
Man Industries’ stock opened positively at ₹224.8, reflecting a 4.6% increase from its previous closing price of ₹214.85. The stock soon hit the 20% upper circuit, touching ₹257.8, fueled by strong buying momentum.
However, the stock’s broader trend has been somewhat volatile. Over the last year, it has delivered negative returns of around 33%, and even in the past month, the gains were limited to 11%. Despite this surge, the stock is still trading at a 50% discount from its 52-week high of ₹513, recorded on July 8, 2024.
| Stock Data | Value |
|---|---|
| Market Cap | ₹1,675 Cr. |
| Current Price | ₹258 |
| 52-Week High/Low | ₹514 / ₹201 |
| Stock P/E | 15.3 |
| Book Value | ₹225 |
| Dividend Yield | 0.77% |
What Triggered the 20% Rally?
Several factors contributed to this sudden spike in Man Industries’ share price:
1. Strong Technical Indicators
- The Relative Strength Index (RSI), a momentum indicator, fell below 22 on March 3rd, signaling oversold conditions.
- A green candle on March 4th indicated a reversal in trend.
- The stock saw a 25% price jump with a volume surge, confirming strong buying interest.
- The RSI has now recovered to 51, indicating bullish momentum. However, the stock is still below its 100- and 200-day moving averages, which could act as resistance.
2. Broader Market Recovery
The overall stock market rebounded after a prolonged downturn.
- Nifty 50 climbed 1.17% to 22,339.95.
- Sensex surged 1% to 73,734.54.
- Improved investor sentiment may have played a significant role in driving Man Industries’ share price higher.
3. Strong Order Book & Future Outlook
Man Industries recently secured ₹250 crore worth of new orders, bringing its total order book to ₹2,900 crores, set for execution over the next 6-12 months.
Additionally, the company is bidding for projects worth ₹15,000 crores, indicating a robust growth pipeline.
- Management expects volume growth of 20-25% in FY26.
- EBITDA margins are projected at 12%, with potential improvements from high-margin projects.
- Limited exposure to the U.S. market minimizes risks from recent U.S. tariffs.
Financial Performance
While revenue has seen a slight dip, profitability remains strong.
| Financial Metric | Q3 FY24 | Q3 FY25 | YoY Change |
|---|---|---|---|
| Revenue | ₹833 Cr. | ₹731.2 Cr. | -12% |
| Net Profit | ₹30.6 Cr. | ₹34 Cr. | +9.7% |
Shareholding Pattern
Ace investor Ashish Kacholia holds a 2.1% stake in Man Industries, indicating his confidence in the company’s growth potential.
| Investor Category | Holding (%) |
|---|---|
| Promoters | 46.2% |
| Foreign Institutional Investors (FII) | 2.16% |
| Retail Investors | 49.05% |
| Domestic Institutional Investors (DII) | 2.64% |
Key Financial Ratios & Valuation Metrics
| Metric | Value |
|---|---|
| ROCE | 14.4% |
| ROE | 8.07% |
| Debt to Equity | 0.15 |
| Price to Book Value | 1.15 |
| EPS | ₹16.9 |
| Intrinsic Value | ₹232 |
| Graham Number | ₹292 |
| Industry P/E | 23.6 |
| PEG Ratio | 1.31 |
- The company has strong free cash flows of ₹137 Cr. (1-Year) and ₹346 Cr. (5-Year).
- Debt remains low at ₹216 Cr., reducing financial risk.
- The promoter holding stands at 46.2%, ensuring stability in decision-making.
About Man Industries (India) Limited
Man Industries is a major player in the steel pipe industry, manufacturing LSAW, HSAW, and ERW pipes used in oil & gas, petrochemicals, water transport, fertilizers, and hydrocarbon transmission.
The company is known for its high-quality large-diameter pipes and has exported products globally, making it one of the leading manufacturers in the sector.
Conclusion: Should Investors Consider Man Industries?
The 20% upper circuit in Man Industries’ stock can be attributed to technical indicators, overall market recovery, and a strong order book.
While the stock is still trading at a discount to its 52-week high, investors should keep an eye on key resistance levels, especially the 100- and 200-day moving averages.
Man Industries’ robust pipeline, improving margins, and limited exposure to geopolitical risks make it an interesting stock to watch for long-term investors. However, given the recent volatility, short-term investors should stay cautious and track price movements before making any investment decisions.
Would you invest in Man Industries after this surge? Let us know in the comments!
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Disclaimer: This blog post is for informational purposes only and should not be considered financial advice. Investors should conduct thorough research and consult with a qualified financial advisor before making any investment decisions.