SHAILY ENGINEERING

WHAT IS DRIVING THIS STOCK'S MULTIBAGGER RUN?

Shaily Engineering Plastics, a top exporter of high-precision engineered plastic products, has seen a significant surge in its share price, rising from <span class='webrupee'>₹</span>226 to <span class='webrupee'>₹</span>542 in the past year, marking a 140% gain.

The stock witnessed an impressive appreciation since its low of <span class='webrupee'>₹</span>191 in May 2023, now trading with a gain of 184%, reaching a new record high of <span class='webrupee'>₹</span>578 per share.

Over the last decade, the stock delivered a remarkable return of 4920%, rising from <span class='webrupee'>₹</span>10.80 apiece.

Systematix Institutional Equities initiated coverage on the stock with a target price of <span class='webrupee'>₹</span>720 apiece, indicating a potential upside of 33% from the recent closing price.

Shaily Engineering Plastics manufactures and sells customized components in niche segments, serving various industries such as healthcare, consumer, personal care, appliances, automotive, and lighting sectors.

Key factors driving optimism include decades of experience, diversification across industries, foray into steel furniture business, and entry into IP-led insulin pens.

Consumer and healthcare segments are the primary growth drivers, with partnerships in designing and manufacturing medical devices crucial for specific blockbuster drugs.

Strong margins are expected ahead, with robust capacity expansion bolstering customer confidence despite lower capacity utilization due to large capital expenditures.

With no significant planned capital expenditures, the company anticipates RoCE exceeding 20% by FY26, generating <span class='webrupee'>₹</span>1.8 billion in free cash flows from FY25 to FY26.

Overall, Shaily Engineering Plastics is expected to post significant growth in revenue, EBITDA, and profit after tax from FY23 to FY26, driven by strategic initiatives and market demand.