Microcap stock surges by 7% following its acquisition of 33,570 shares in Sheela Foam.

The company bought 33,570 equity shares of Sheela Foam on 20th March 2024 for a total cost of cash consideration of Rs 3.14 crores.

According to an article in Trade Brains – Shares of micro-cap stock jumped approximately 7 percent in Thursday’s trading session after the company bought 33,570 equity shares of an India-based company that is a leader in Polyurethane (PU) Foam for investment purposes. In the last five trading sessions, the company’s stock has jumped nearly 10 percent. 

With a market capitalization of Rs 570 crores, the stocks of International Conveyors Limited, India’s only Listed player in PVC Conveyor Belting, started their trading session on Thursday at Rs 80.86 and currently trades at Rs 84.47, indicating a gain of around 7 percent as compared to the previous closing price of Rs 79.13 apiece. 

Such bullish share price movements are witnessed today after the company, through a recent regulatory filing with the Bombay Stock Exchange (BSE), intimated that they have acquired a stake in ‘Sheela Foam’, a leader in Polyurethane (PU) Foam for investment purposes. 

The company bought 33,570 equity shares of Sheela Foam on 20th March 2024 for a total cost of cash consideration of Rs 3.14 crores. 

Incorporated in 1971, Sheela Foam, ranked as the company with the largest-selling Polyurethane (PU) Foam in India, is a multi-billion rupee entity with a nationwide presence. Some of the well-known brands under the company’s portfolio include ‘Sleepwell’, ‘Feather Foam’, and ‘Lamiflex’, among others. 

During the recent financial quarters, the company has reported underperforming numbers as far as the operating revenues and after-tax profits are concerned. The former slipped from Rs 43 crores during Q2FY24 to Rs 23 crores during Q3FY24 and the latter, keeping the time frame the same, reduced from Rs 23 crores to Rs 19 crores. 

On a contrasting note, the company, due to decent performance annually, reported positive movements in its financial ratios with the return on equity (RoE) increasing from 7.47 percent during FY21-22 to 13.36 percent during FY22-23 and the return on capital employed (RoCE) from 14.04 percent to 19.07 percent. 

International Conveyors Limited is engaged in the business of manufacturing and trading conveyor belting as well as the generation & sale of power. The company operates its business through various segments, viz, conveyor Belting, wind energy, and trading goods

segment. It sells products within domestic boundaries and exports them to other countries, deriving the majority of revenue from the same.