Arcotech hits a lifetime high

Arcotech is extremely volatile today morning. The stock hit a lifetime high today at Rs.464, up over 10% from Friday’s close of Rs.421 and after that it has come off the high. It is currently at Rs.430, up some 2%.

This company makes copper and brass trips and foils and also non-ferrous alloys like Nickel Silver, Nickel Brass, Cupro Nickel, Silver bearing copper and many more such alloys. Apart from making the usual product range of ingots, strips, sheets, foils etc, it also makes coin blanks and seems to have emerged a big gainer in the demonetization drive.

On Friday the company stated that it has received a Rs.335 crore order from the India Government Mint for supply of 6000 metric tonne of nickel brass with an additional 2 for Rs.5 coin worth Rs.268 crore. This order is to be executed in  span of 18-20 months.

Last week, in a TV interview, our Editor, Mr.SP Tulsian had said, “"It is a very highly capital intensive industry and that is the reason I am expecting that probably in FY'16 it can be an EPS of about Rs 18 while FY'17 can be Rs 21 and 22. If you see the equity pattern, Rs 21 crore is equity face value of Rs 10, net worth is close to about Rs 185 crore and debt is Rs 260 crore. So, this is a very interesting company and because of the fall in the non-ferrous metals, I am quite positive on the stock.”