Stock hits 5% after acquiring 55% stake in Tripathi ltd for defence & aerospace business

During Monday’s trading session, the shares of a company engaged in the engineering and mould base industry hit a 5 percent upper circuit at Rs. 644.7 on BSE, after announcing an acquisition to expand its presence in defence, aerospace and weapons manufacturing. 

With a market cap of Rs. 362.6 crores, the shares of Sunita Tools Limited opened in the green at Rs. 644.7, up by around 5 percent, as against its previous closing price of Rs. 614. 

What’s the news: 

Sunita Tools Limited, as per its latest regulatory filings with the stock exchanges, announced a strategic move to grow its presence in Defence, Aerospace and Weapons manufacturing. 

The company has acquired a 55% majority stake in cash acquisition of Tripathi Aerotech and Weapons Manufacturing Pvt Ltd. The formalities for this acquisition will be completed within 60 days of signing the agreement. 

This acquisition is part of Sunita Tools Limited’s plan to expand its product range to include aerospace, defence, and weapons manufacturing. It will also allow the company to take on large orders for gun parts and artillery shell cases. 

By combining its 36 years of technical expertise with the capabilities of Tripathi Aerotech, Sunita Tools aims to manufacture a wide range of defence-related products for both the Indian and global markets. 

The company expects this expansion to enhance its defence and aerotech capabilities, contributing to increased profitability. Additionally, other subsidiary companies within the Sunita Tools Group, which have similar machinery, will also benefit from this acquisition. 

About the Target Entity: 

Tripathi Aerotech and Weapons Manufacturing Pvt Ltd is a company formed through the collaboration of Shigna Industrial Corporation, owned solely by Mr. Rajeev Tripathi, and Sunita Tools Limited. 

Shigna Industrial Corporation and Tripathi Aerotech are registered vendors and currently work with various defence and ordnance factories and establishments across India. 

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Financials:

The company reported a significant growth in revenue from operations, experiencing a year-on-year rise of nearly 15 percent, increasing from Rs. 13.84 crores in FY23 to Rs. 26 crores in FY24. 

Similarly, during the same period, the company’s net profit increased from Rs. 3 crores to Rs. 4.8 crores, representing a rise of around 60 percent YoY. 

Stock Performance: 

The stock has delivered multibagger returns of nearly 208 percent in one year, while around 30 percent of negative returns in the last six months. So far in 2024, the shares of Sunita Tools have given positive returns of about 15 percent. 

About the company: 

Sunita Tools Limited is engaged in the business of engineering and mould base industry. It manufactures ground plates, mould bases, and precision CNC machining. 

The company’s products serve as essential components for the manufacturing industries, spanning automotive, pharmaceutical, electronics, consumer goods, aerospace and numerous other sectors. 

Written by Shivani Singh 

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