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RHI Magnesita stock may give 25% returns in next one year

Jul 29, 2023Jul 29, 2023

Refractories are so essential in our modern world that people will be surprised to know that 1 tonne of steel demands around 10-15 kg of refractories, while for producing 1 tonne of cement, it demands 1 kg of refractory. Simultaneously, there is a compulsory demand of refractories for producing aluminium, glass and copper. RHI Magnesita India Ltd. was created in 2021 from the integration of three Indian subsidiaries of RHI Magnesita Group: 1) RHI Clasil: manufacturer of high alumina based refractory products with its plant in Andhra Pradesh. It was Incorporated in 2006 as a result of acquisition of 51% shares of Clasil Refractories Pvt. Ltd; 2) RHI India: which was involved in selling refractory products and services to the Indian steel industry also integrated; 3) Orient Refractories Ltd, a public limited company was acquired by RHI AG. With Orient Refractories Ltd being a market leader in manufacturing and supplying a wide variety of refractories and monolithic in India, this complete integration has synergized, simplified and consolidated the strength of the Group by serving its customers more efficiently as one combined entity. The parent overseas company, RHI Magnesita N.V., retains a 70% stake in RHI Magnesita India Ltd. The company reported impressive consolidated quarterly numbers for June 2022 with net sales at Rs 602 crore, up by 40% from Rs 429 crore as of June 2021. The quarterly net profit went up by 64% to Rs 82 crore from Rs 49 crore of the same quarter for the last fiscal. The EBITDA went up by 53.91% to Rs 119.85 crore for the June 2022 quarter from Rs 77.87 crore of the June 2021 quarter. The RHI Magnesita stock has been doing wonderfully in the Indian stock market and been in an uptrend for quite some time. The RHI Magnesita share is being accumulated by equity mutual fund managers and portfolio investors alike. Analysts tracking the company report that on every uptrend in the RHI Magnesita stock price, it is accompanied by huge and rising volumes which signal increased participation in the rally by all class of investors. Most analysts expect the stock price of RHI Magnesita to appreciate by over 25% in the next one year time frame on the back of higher margins and revenue, hence portfolio investors can accumulate the stock for superlative gains.Rajiv Kapoor is a share broker, certified mutual fund expert and MDRT insurance agent.

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