Porinju Veliyath-backed small-cap stock jumps 18%; know what’s fueling rally in counter

Renowned investor Porinju Veliyath-backed small-cap stock Orient Bell spurted 18 per cent to touch a day’s high level of Rs 684 per share on the BSE during Wednesday’s session. The surge in the scrip mainly came after the company announced ratings upgrade by CRISIL through exchange filing. 

Crisil ratings upgraded the Orient Bell ratings on the bank facilities of the company to ‘CRISIL A/Stable/CRISIL A1’ from 'CRISIL A-/Stable/CRISIL A2+’. The rating agency believes that the company will continue to benefit from its established market position and comfortable financial risk profile. 

The upgrade factors improvement in the overall business and financial risk profiles of OBL. Operating performance has improved by revenue growth of around 30 per cent during fiscal 2022 from previous fiscal, backed by strong brand equity, and improved sales contribution from value added-products leading to better operating profitability, Crisil said in detailed rationale. 

The stock of one of the leading manufacturer of ceramic and vitrified tiles has nearly doubled or up 98 per cent in the last six months, as compared to a 8.5 per cent decline in the benchmark index. 

The stock was trading near its 52-week high of Rs 687.55 per share, this was touched on June 02, 2022, in an otherwise weak market. At around 01:35 PM, the counter was up nearly 17 per cent to Rs 676.9 per share on the BSE as against 0.09 per cent fall in the S&P BSE Sensex. 

Veliyath holds around 704,512 equity shares, which translates into around 5 per cent stake in the Orient Bell, as per the March 2022 shareholding pattern of the company. He publicly holds 17 stocks with a net worth of over Rs 155.4 crore as of June 29, 2022, according to trendlyne.com. 

The company its annual FY22 annual report had said that the growth in the tiles market will continue to be driven by growth in real estate and housing sector, rise in disposable income, growth in renovation and remodelling activities, renewed interest in “DIY trends in home improvement”. 

The customer has become more aware and is keen to engage in tile buying decision-making and designing the overall look of the home, the company added.