Rama Steel Tubes Share Surges 32% in 2 Days, Enters Solar Energy Sector (6 September 2024)

Rama Steel Tubes, a leading manufacturer of steel products, has been making waves in the stock market with its recent surge in share price. The company’s stock has gained an impressive 32% in the last two trading sessions, closing at Rs 13.85 on September 5th, 2024. This rally comes on the heels of two significant developments that have positively impacted investor sentiment.

Rama Steel Tubes Enters Solar Energy Sector

One of the key factors driving the stock’s surge is Rama Steel Tubes’ entry into the solar energy sector. The company has joined hands with Onix Renewable to supply steel structures and single-axis trackers for solar projects, with plans to expand to dual-axis trackers in the future. Rama Steel Tubes has developed specialized steel structures and tracker tubes that are essential for solar projects.

“We are proud to announce our entry into the Green Energy segment and are determined to deliver products that ensure the highest standards of reliability, durability, and performance, which are critical to the long-term success of solar greenfield projects,” the company said in a statement.

This move into the renewable energy sector is expected to diversify Rama Steel Tubes’ revenue streams and capitalize on the growing demand for solar energy solutions. The quality and durability of the company’s steel structures will play a crucial role in ensuring the long-term success and efficiency of solar projects.

Rama Steel Tubes Forms Defence Subsidiary

Another significant development that has contributed to the stock’s rally is the formation of a wholly-owned subsidiary company called ‘Rama Defence Private Limited’. The company received the certificate of incorporation from the Ministry of Corporate Affairs on September 2nd, 2024.

The newly formed subsidiary will focus on the business of defence equipment, arms, ammunition, explosives, and related military and security hardware. This move diversifies Rama Steel Tubes’ operations and taps into the growing demand for defence products.

Reacting to the news, Rama Steel Tubes shares ended 10.17% higher at Rs 11.59 on September 4th, 2024, on the BSE. The stock’s rally continued in the current trading session, with a gain of 19.49% to reach Rs 13.85.

Multibagger Stock with Impressive Returns

Rama Steel Tubes has been a multi-bagger stock, delivering impressive returns to its investors over the years. The stock has gained 330% in the last three years and a staggering 1715% in the last five years.

The company’s strong financial performance and growth prospects have attracted investors, leading to the stock’s consistent rise. Rama Steel Tubes is a manufacturer of Hot Rolled Coil, Hollow Section, G.I Pipe, CR Pipe, Poles, M.S Poles, Steel Bla & Tubes Hollow Sections.

Technical Analysis

In terms of technical analysis, Rama Steel Tubes’ stock is trading in a positive zone. The relative strength index (RSI) stands at 60.5, indicating that the stock is neither overbought nor oversold. The stock is trading higher than its 5-day, 10-day, 20-day, 30-day, 50-day, 100-day, 150-day, and 200-day moving averages, suggesting a strong upward trend.

High trading volumes have also contributed to the stock’s rally. On September 5th, 2024, 3.89 crore shares of Rama Steel Tubes changed hands, amounting to a turnover of Rs 51.19 crore on the BSE. The company’s market capitalization has risen to Rs 2,059 crore on the BSE.

Outlook and Analyst Recommendations

Analysts remain bullish on Rama Steel Tubes’ prospects, given its entry into the solar energy sector and the formation of its defence subsidiary. The company’s diversification into these high-growth sectors is expected to drive its future growth and profitability.

However, investors should always conduct their own research and consider their risk appetite before investing in any stock. Market conditions and company fundamentals can change rapidly, and it’s essential to stay informed and make informed decisions.