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Business News/ Markets / Stock Markets/  Vibhor Steel Tubes share price jumps nearly 100% in two months; should you buy, sell or hold?
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Vibhor Steel Tubes share price jumps nearly 100% in two months; should you buy, sell or hold?

Vibhor Steel Tubes share price surged 100% since debut in February, opening today at ₹299.50 on BSE. Dr. Ravi Singh of Religare Broking Ltd highlighted concerns about cash flow and net profit not increasing significantly.

Vibhor Steel Tubes share price today opened at ₹299.50 apiece on BSE, the stock touched an intraday high of ₹304.70 and an intraday low of ₹291.50. (Pixabay)Premium
Vibhor Steel Tubes share price today opened at 299.50 apiece on BSE, the stock touched an intraday high of 304.70 and an intraday low of 291.50. (Pixabay)

Since its debut in February, Vibhor Steel Tubes share price has rocketed by about 100% in just two months. Investors have witnessed a gain of over 29,000 in the counter's value since its launch. Vibhor Steel Tubes share price today opened at 299.50 apiece on BSE, the stock touched an intraday high of 304.70 and an intraday low of 291.50. 

On February 20, Vibhor Steel Tubes share price had a spectacular debut on the exchanges. The share price of Vibhor Steel Tubes opened on the NSE at 425, which is 181.5% more than the 151 issue price. Vibhor Steel Tubes share price debuted on the BSE at 421 per share, up 178.81% from the issue price. The stock closed with a listing gain of 195.5%.

Also Read: Vodafone Idea share price jumps 10% as focus shifts on FPO allotment, listing date

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Dr. Ravi Singh, SVP - Retail Research, Religare Broking Ltd, said that Vibhor Steel Tubes Limited is a maker, exporter, and supplier of steel pipes and tubes to the heavy engineering industries in India. The company saw healthy growth in sales numbers, but the major concern for the stock is its cash flow and net profit, which are not increasing significantly. Technically, the Vibhor Steel Tubes share price action is indicating some weakness in price. For existing positions, one should hold with a stop loss of 270.

Also Read: Vibhor Steel Tubes IPO sees stellar demand on day 3, issue booked over 298.86 times; check latest GMP

According to news reports, the company's profits for the quarter that ended in December was 4.31 crore. The profit print for the year that ended in FY23 was 21.06 crore. The December quarter's net sales totalled 251 crore. Profit for the nine months that ended on December 31 was 781.51 crore, compared to 1,114.30 crore for the fiscal year 2022–2023.

With two decades of experience, Vibhor Steel Tubes Limited is a producer, exporter, and supplier of steel pipes and tubes to several heavy engineering sectors in India. There are several uses for steel pipes and tubes, including frames and shafts, bicycle frames, furniture, CDW pipes for shockers, steel pipes for different structural applications, steel pipes for different technical applications, etc. The firm offers a fairly large selection of steel tubes and pipes.

Also Read: Vibhor Steel Tubes share price makes a blockbuster debut, stock lists with 181.5% premium at 425 on NSE

Vibhor Steel Tubes IPO

The 72.17 crore Vibhor Steel Tubes Limited IPO comprised a fresh issue without an offer-for-sale (OFS) component.

The company's working capital requirements were to be met using the net proceeds of the transaction in addition to being utilised for general corporate purposes. 

On the third day, Vibhor Steel Tubes IPO subscription status was 298.86 times, as per BSE data.  

According to the company's Red Herring Prospectus (RHP), the earnings per share (EPS) for the fiscal year 2023 was 14.85. The price-to-earnings (P/E) ratio is around 10.2 when the company's upper band IPO price of 151 is taken into account.

Compared to its listed peers, which range in P/E from 31 to 65, such as APL Apollo Tubes Ltd, Hi-Tech Pipes Ltd, Goodluck India Ltd, and Rama Steel Tubes Ltd, the P/E of the Vibhor Steel Tubes IPO was lower. As a result, values were significantly lower.

The company's RHP indicated that the industry peer group's average P/E ratio is 45.39.

Also Read: Vibhor Steel Tubes IPO: Experts decode key reasons behind robust 300 times subscription ahead of allotment

Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decisions.

 

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Published: 23 Apr 2024, 03:10 PM IST
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