IFGL Refractories surge 27% in 4 sessions on strong Q2 earnings; should you buy?
IFGL Refractories surged almost 8 percent on Wednesday, extending gains for the fourth straight session to hit a new high on the back of robust September quarter (Q2FY24) earnings. The stock rose as much as 7.8 percent to its record high of ₹874 in intraday deals today. It has now soared 344 percent from its 52-week low of ₹196, hit on March 28, 2023.
Meanwhile, in 4 sessions (November 17-22), the stock has advanced 27 percent. In the past one month, it has zoomed 87 percent, as compared to a 2 percent rise in BSE Sensex. In the last 1 and 2023 YTD as well, the stock has given multibagger returns, rallying 211 and 234 percent, respectively.
In Q2FY24, the firm's profit after tax jumped 95 percent YoY to ₹38 crore from ₹19.5 crore in a year ago quarter. IFGL reported highest-ever quarterly revenue of ₹459.5 crore, representing a 33 percent year-on-year (YoY) growth. Earnings before interest, taxes, depreciation, and amortisation (EBITDA) for the quarter also jumped of 85 per cent YoY at ₹71.7 crore and EBITDA margin witnesses an expansion of 440 bps at 15.6 percent in Q2FY24.
Post the earnings, brokerage house Dalal & Broacha initiated coverage on the stock with a 'buy on dips' rating and a target price of ₹786, indicating a 10 percent downside due to the recent surge. "IFGL emerges as a robust contender in the specialized refractories market, boasting a market share of 6 percent in the overall Indian refractory industry and an impressive 15 percent in the Indian flow control industry. The company's management has outlined ambitious plans, aiming to double its revenue from FY21 to FY26.
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