Shree Rama Multi-Tech Shares Surge After ₹18 Crore Capex Plan Announcement

Shares of Shree Rama Multi-Tech Ltd (SRMTL), a micro-cap company specializing in packaging materials, hit the 2% upper circuit at Rs. 27.38 per share during Tuesday’s trading session.

Shree Rama Multi-Tech Shares Surge After ₹18 Crore Capex Plan Announcement

The Shree Rama Multi-Tech Ltd, a micro-cap packaging material company was up around 2% to the high of Rs. 27.38 a share in Tuesday’s trade when the firm declared a behemoth CAPEX for the expansion of its capacity.

Share Price Movement and Performance:

Shares in Shree Rama Multi-Tech jumped sharply after the previous close of Rs. 26.85 to Rs. 27.38 per share Tuesday in the trading session that led to the upper circuit limit of the stock during the trading session. Quite evident from the robust interests among investors and investors seeking future growth prospects of the Company, the stock has had a growth of more than 1,000% from a five-year period and with excellent market performance.

Expansion Plan Details

The Board of Directors of Shree Rama Multi-Tech approved Rs. 18 crores worth of CAPEX in the board meeting held on October 15, 2024. The plan would be invested in the acquisition of tubing machines, which would enhance the production capacity of the company by up to 20%. The firm currently has the monthly capacity to produce 5 crore tubes. Each of the capacities is fully utilized. This would be supplemented with another addition of 95 lakh tubes monthly. The expansion will be completed in six months and, hence, would enhance the company’s ability to meet the increased demands.

Financing expansion:

The above project would incur Rs. 18 crores, which will be either accured internally or borrowed from the banks and financial institutes because it would not cause much damage to the company financially and this investment will increase its capacity to grab any rising opportunity in the marketplace considering the demand growth in the packaging solutions produced by the company.

Product Line

Shree Rama Multi-Tech boasts a diverse range of high-quality packaging products, such as:

  • Multilayer tubes
  • Seamless tubes
  • Tube laminates
  • Flexible laminates
  • Self-adhesive labels
  • Paper and plastic cups
  • Tarpaulin

Financial Analysis

In addition, despite minor net sales decline by a little margin, the amount of profit is excellent. Q1 FY25 saw Rs. 42.98 crore as net sales as against Rs. 43.85 crore in the corresponding quarter last fiscal. Still, the net profits soared 115% to Rs. 4.20 crore from Rs. 1.95 crore the company posted during the corresponding period last fiscal. Above all, the above growth in profits clearly shows the efficient cost management of the company and exploitation of available capacity to produce higher profitability.

About Shree Rama Multi-Tech Ltd

SRMTL is an integrated packaging company in Gujarat, India, which was incorporated in the year 1993. It boasts of a gigantic distribution network in both domestic as well as international markets. As it possesses an installed capacity of 9,514 lakh multi-layer tubes, it serves more than 150 clients. The renowned Nirma group holds a 61.57% share in the company, thus making it even stronger with the support of the comprehensive expertise and resources of the Nirma group.

For Shree Rama Multi-Tech Ltd it has been very exciting in CAPEX plan of amounting ₹18 crores in respect of getting company ready for sustainable growth by raising its production capacity with a very good product-line combined with the strategic approach, at the same time helping to raise investor confidence thereby further building the legacy SRMTL.

Disclaimer:

All above recommendations are of the market analysts. Neither the author, nor the brokerage firm, nor Stockstoday.in will be responsible for any loss arising out of any such decision taken based upon this information. All users are cautioned to take their own expert advice prior to making any investment decision.

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