Up 6.5x in 2 years: SBI Securities suggests buying this small-cap stock for long-term, check target and stop loss

Small-cap stock to buy: The Indian benchmark indexes closed down on a very turbulent day on Friday, June 21, with the Nifty at 23,500. The Sensex fell 269.03 points, or 0.35 per cent, to 77,209.90, while the Nifty dropped 65.90 points, or 0.28 per cent, to 23,501.10.

Meanwhile, brokerage SBI Securities recommended buying this midcap stock from a long-term perspective. 

Small-cap stock to buy

The brokerage suggested buying stainless steel pipes and tube-making company Venus Pipes & Tubes Ltd stock for 12 months.

Venus Pipes- Share price target

SBI Securities has advised to buy Venus Pipes shares for 12 months. The brokerage has suggested buying the shares with a target price of Rs 2,415 per share. This way, the stock can give up to 10 per cent returns from its current price.

On Friday, June 21, the shares of Venus Pipes closed trading at Rs 2,175.95 each, up 6.11 per cent on BSE.

Why brokerage SBI Securities bullish on this stock

According to SBI Securities, the company has won the contract from an EPC contractor in semiconductors from the US and Middle East market. It expects seamless to contribute 40-43 per cent to total revenue going forward and welded (~57-60 per cent). In the first phase, the company is setting up value-added fittings and welded tubes for Rs 115 crore. This project is expected to be completed by March 2025. In the second phase, value-added fittings, welded/seamless pipes/tubes are being established for Rs 65 crore. This project is expected to be completed by December 2025. At present the company has an order book of Rs 240 crore, which has to be completed in 100 days.

During FY24, the company forayed into sectors such as oil and gas, railways, food processing, and paint industries. 

Venus Pipes stock performance

If we look at the performance of small-cap stock, the returns in the last year are around 92 per cent. Whereas the stock has shown a rise of 63 per cent in six months. The stock has risen 53 per cent so far in 2024. At the same time, the return of the last 2 years has been 565 per cent. On June 21, 2024, the stock increased by 6.11 per cent and closed at the level of 2175.95. The 52-week high of the stock on BSE is 2,489.95 and the low is 1,104.05. The market cap of the company is Rs 4,416.33 crore.

The views/suggestions/advice expressed here in this article are solely by the brokerage firm. Zee Business suggests its readers consult their investment advisers before making any financial decision.