Why did this Ashish Kacholia stock hits 20% upper circuit today? Here’s why

Shares of one of the leading manufacturers of large-diameter pipes with three decades of presence in the API Pipe Industry hit a 20 percent upper circuit on exchanges during Wednesday’s trading session. Below are some key factors contributing to the fluctuation in the share price.

Price Movement

With a market cap of Rs. 1,668.8 crores, the shares of Man Industries (India) Limited opened in the green at Rs. 224.8, up by around 4.6 percent, compared to its previous closing price of Rs. 214.85.

The stock has delivered negative returns of nearly 33 percent over a one-year period, as well as around 11 percent returns in the last one month. The stock hit its 52-week high at Rs. 513 on 8th July 2024, and compared to its current trading price of Rs. 257.8, the stock is trading at a discount of nearly 50 percent.

Reason for the stock surge

On March 3rd, the Relative Strength Index (RSI) dropped below 22, signalling a potential reversal from oversold conditions. A green candle on March 4th confirmed a momentum shift, with the volume surge driving a 25 percent price jump. RSI now stands at 51, though the stock remains below its 100- and 200-day moving averages (MA), key trend indicators.

Additionally, the rebound in market sentiment on Wednesday may have contributed to the surge, as the stock market bounced back after a prolonged losing streak. The Nifty is currently in the green at 22,339.95, up by 1.17 percent or 257.3 points, while the Sensex increased by 1 percent, gaining 703.6 points to reach 73,734.54.

Despite these factors, there isn’t a specific, clear reason behind the surge in Man Industries’ share prices beyond the overall market recovery and technical indicators.

Also read: L&T Group stock to buy now for an upside potential of more than 20%; Do you own it?

Order Book & Future Outlook

As of Q3 FY25, Man Industries has secured new orders worth Rs. 250 crores, bringing the total order book to ~Rs. 2,900 crores, which is expected to be executed over the next 6 to 12 months. Additionally, the current bid book stands at around Rs. 15,000 crores.

Despite the current market softness, management remains confident in meeting its FY26 revenue targets and anticipates a volume growth of 20-25 percent. EBITDA margins are expected to be conservative at 12 percent going forward, with potential for improvement as new projects stabilize.

The current order book is largely composed of value-added products, which are expected to contribute to higher margins. Management is optimistic about future growth, driven by new projects and the strong bid book pipeline of Rs. 15,000 crores.

The impact from recent U.S. tariffs is expected to be minimal, as the company has limited exposure to the U.S. market, accounting for just 2-5 percent of its turnover.

Financials

Man Industries experienced a decline in its revenue from operations, showing a year-on-year decrease of around 12 percent from Rs. 833 crores in Q3 FY24 to Rs. 731.2 crores in Q3 FY25. In contrast, its net profit increased during the same period from Rs. 30.6 crores to Rs. 34 crores, indicating a marginal rise of nearly 9.7 percent YoY.

Shareholding Pattern

As per the December 2024 shareholding pattern, the Promoters hold a 46.15 percent stake in the company, Foreign Institutional Investors (FII) hold a 2.16 percent stake, while Retail Investors and Domestic Institutional Investors (DII) hold a 49.05 percent and 2.64 percent stake in Affordable Robotic, respectively.

According to the latest shareholding pattern with the BSE, the ace investor Ashish Kacholia holds a 2.1 percent stake in the company.

About the Company

Man Industries (India) Limited, the flagship Company of Man Group, is engaged in the business of manufacturing, processing and trading of submerged arc-welded pipes & steel products.

The company is one of the largest players in LSAW pipes, spirally welded pipes and coating systems, and one of the largest manufacturers and exporters of large-diameter carbon steel line pipes (LSAW, HSAW and ERW) used for multiple high-pressure transmission applications for oil & gas industry, petrochemicals, water, dredging & fertilizers, hydro-carbon and CGD Sector.

Written by Shivani Singh

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