Tega Industries rallies 8%, hits 52-week high on strong growth prospects

Shares of Tega Industries hit a 52-week high of Rs 709.55 as they surged 8 per cent on the BSE in Thursday’s intra-day trade on strong growth prospects. In the past three trading days, the stock of the industrial products' company has rallied 13 per cent, taking the stock above its previous high of Rs 706.25, touched on March 9, 2023. In comparison, the S&P BSE Sensex was up 0.27 per cent at 58,374 at 12:48 pm.

Tega made its stock market debut on December 13, 2021. The company issued shares at price of Rs 453 per share through initial public offer (IPO). Post listing, the stock hit a record high of Rs 767 the same day. On the flipside, it touched a record low of Rs 398 on February 24, 2022.

In the past one month, the stock has gained 11 per cent after National Company Law Tribunal (NCLT) approved Tega's Resolution Plan for the acquisition of McNally Sayaji Engineering (MSEL) through Corporate Insolvency Resolution Process (CIRP).

Tega is a global leader in designing and manufacturing ‘critical-to-operate’ consumables for the mining, mineral processing, and material handling industries. MSEL offers pioneering solutions in the field of manufacturing and marketing of crushing, screening, grinding, material handling, and mineral processing equipment coupled with integrated customer support and aftersales service.

Tega said the acquisition is expected to be completed over the next two months. The financing for the acquisition will be through an optimal mix of internal resources and debt.

The company said it is seeking to expand its product offerings to grow its business globally and in India. "This acquisition is expected to enhance value for the company and its shareholders, marked by revenue growth and margin expansion opportunities in medium term. This acquisition is expected to position Tega among the most integrated global companies in its space, strengthening its brand and visibility as a global solutions provider," the company said.

Meanwhile, during the October-December quarter (Q3FY23), Tega's revenue grew 15 per cent year-on-year (YoY) to Rs 258 crore from Rs 297 crore in the year-ago quarter. Operating Ebitda improved to 22.66 per cent as against 19.78 per cent same period last year. Profit after tax jumped 44 per cent YoY at Rs 48.4 crore during the quarter. The company has robust order book of Rs 325.3 crore as on December 31, 2022.

The company's management said Q3 results were built on the strong momentum from H1 sales, which have grown strongly across all regions. The growing scale has also led to improved operating leverage and significant margin improvement both yearly and quarter-over-quarter.

Significant improvement in global supply chain, normalization of logistics and transport costs also contributed to improved margins which are visible in the Q3 numbers as well, the management said.