Tega Industries shares hit 10% upper circuit, touch new life high; what’s driving the rally?

Tega Industries shares were locked in a 10 per cent upper circuit and touched a new record high of Rs 899.85 per share on the BSE during Wednesday’s trading session. The buying interest in the stock can be attributed to strong January-March quarter earnings for the financial year gone by.

The Kolkata-based engineering solutions provider company’s shares gained over 46 per cent since listing. Tega Industries shares made a stellar market debut at a 66 per cent premium at Rs 760 per share from the IPO issue price of Rs 453 at the upper end in December 2021.

Tega Industries Q4 results

Tega Industries’ profit after tax (PAT) grew more than 58 per cent year-on-year (YoY) to Rs 77.3 crore in the March quarter earnings as compared to Rs 48.9 crore in the year-ago quarter. It logged a 36.6 per cent (YoY) growth in revenue to Rs 396.4 crore in the last three months period of the fiscal year gone by.  

The company’s earnings before interest, tax, depreciation, and amortisation (EBITDA) stood at Rs 102.8 crore from Rs 68.9 crore registered in the year-ago period, which translates to a growth of over 49.2 per cent YoY. While margin, a key measure of the firm's performance, improved to 26 per cent from 24 per cent a year ago.

On expectations of better results, Tega Industries’ stock has been in demand for the last three sessions as it has gained over 12 per cent.

Management’s commentary

Tega Industries’ management reiterated that it expects consolidated revenue to grow 15 per cent or more in the coming years while the margin profile is also expected to inch up due to benign commodity prices.

Tega is a global leader in designing and manufacturing 'critical-to-operate' consumables for the mining, mineral processing, and material handling industries.

Tega Industries Dividend 2023

The Board of Directors of Tega Industries has recommended a final dividend of Rs 2 per equity share (20 per cent) of the face value of Rs 10 each for the Financial Year ended March 31, 2023, subject to the declaration by the members at the Annual General Meeting (AGM).

Brokerages' views

Domestic brokerage firm LKP Securities has a 'buy' call on Tega Industries shares for a target price of Rs 945 apiece. The brokerage is positive as the company is well-positioned to seize the opportunity within the sector it operates, and the future growth prospects remain intact.

Tega Industries' shares price history

Tega Industries’ share price has outperformed the market by surging over 36 per cent in the last one month as compared to Nifty’s rise of over 2 per cent.

The scrip has surged nearly 60 per cent in the past six months against Nifty50’s fall of over 1 per cent. So far in 2023, it has jumped over 50 per cent against the headline index's rise of over 2 per cent during the same period.

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