A lesser-known state-owned company, MSTC, engaged in e-commerce related services across various industry segments, has had a remarkable journey on stock exchanges since its listing on March 29, 2019. Despite any major trigger, the smallcap stock has been consistently hitting new record highs in the recent past on the back of strong volume and high-growth momentum of the economy that boosted investors’ appetite for PSU stocks.
MSTC has been rising for the last three sessions and gained 30% during this period. On Wednesday, the stock rose as much as 8.5% to hit a new all-time high of ₹995.50, in an otherwise weak broader market. In the current month, the stock has risen 9 out of 13 sessions and rallied nearly 49% during the same period.
With the market capitalisation of ₹6,900 crore, the stock has risen 217% in the last one year, while it has zoomed 315% in the last 10 months, rebounding from its 52-week low of ₹239.65 touched on March 28, 2023. The stock has soared 762% since its debut on the stock exchanges in March 2019.
Established in 1964 to regulate the export of ferrous scrap from India, MSTC has diversified into trading various items and e-commerce services viz. e-auctions and e-procurement services. In 1991, the company entered into direct marketing of melting scrap, coke/coal, iron ore, and many other products. Over the years, it has added various new products and services in its portfolio. Currently, it is a mini-ratna category-1 public sector undertaking (PSU) of the government of India, under the Ministry of steel. The government reduced its stake to 64.74% after the company launched an IPO in March 2019.
MSTC has a good track record of paying dividends, with the PSU company declaring an equity dividend of ₹15 per share in the past 12 months. It has declared 9 dividends since its listing. At the current share price, MSTC's dividend yield stands at 1.52%.
For Q2 FY24, MSTC reported net profit of ₹55.34 crore as compared to ₹63.67 crore in the period ended September 30, 2022, registering a year-on-year decline of 13%. The total income fell 21.4% to ₹211.24 crore, from ₹268.90 crore during the same period last year. However, on quarter-on-quarter basis, the profit rose 9.3% YoY from ₹50.60 crore in Q1 FY24, while revenue grew 5.75% from ₹199.76 crore in Q1 FY24.
For the half year ended September 30, 2023, the company posted net profit of ₹105.95 crore versus ₹117.97 crore in the year ago period. The total income stood at 410.99 crore, falling 11.4% from ₹463.72 crore during the 6 months ended September 30, 2022.
During the H1 FY24, the company crossed ₹62,603 crore in terms of value of goods transacted through its e-commerce and marketing verticals. It completed the sale of 31 lakh MT of Barytes for ₹1,007 crore on behalf of The A.P. Mineral Development Corporation Limited in July 2023. Besides, it conducted e-auction of 8.34 lakh MT of Bluestone for ₹35.59 crore on behalf of Haryana State Industrial and Infrastructure Development Corporation (HSIIDC) in July 2023.
The company also sold 2.42 million MT of coal for a value of ₹340 crore through the coal linkage auction on behalf of Cola India Ltd. Besides, 7 million tonnes of coal with the value of ₹1,500 crore was sold through the linkage auction.
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