This smallcap stock surges 40% in 2 sessions; do you own it?

Despite volatility in the broader market, the shares of auto ancillary company Precision Camshafts (PCL) have rallied as much as 40% in just two sessions to hit a fresh 52-week high in intraday trade on Tuesday amid strong volume. In comparison, the BSE benchmark Sensex lost as much as 1.4% in the last two trading days, while the BSE smallcap index climbed 0.6% during the same period.

On Tuesday, PCL shares opened higher for the second straight session at ₹138.31 against the previous closing price of ₹127.92 on the BSE. During the session, the stock surged 16.5% to hit a new 52-week high of ₹149 intraday amid strong volume trade. Paring half of early gains, the auto ancillary stock finally settled at ₹138.22, up 8.05% on the BSE with a market capitalisation of ₹1,312.89 crore. On the volume front, 5.68 lakh shares changed hands over the counter as compared to two-week average volume of 0.45 lakh stocks. On Monday, the counter ended 20% higher.

At the current price level, PCL shares trade 73% higher than its 52-week low of ₹85.45 touched on June 20, 2022. In the calendar year 2023, the counter has risen 37%, while it jumped over 54% in a month and 30% in a week. In the last one year, the stock has given flat returns, while it climbed 28% in the six-month period.

The stock price has gained momentum in the last one month after exchange data showed that Mumbai's star investor Vijay Kedia picked up nearly 1 million equity shares or 1.05% stake in PCL during the January-March quarter of 2022 (Q4FY23). At Tuesday’s closing price level, the value of Kedia’s stake in the company stood at ₹13.8 crore. As per the latest corporate shareholdings filed, Vijay Kishanlal Kedia publicly holds 16 stocks, with a net worth of over ₹729.5 crore, the trendlyne data showed.

The auto-components maker has declared 7 dividends since its market debut in February 2016. In the past 12 months, Precision Camshafts has declared a dividend amounting to ₹1.10 per share. At the current share price level, the company offers a dividend yield of 0.80%.

For the October-December quarter of 2022 (Q3FY23), the company posted net profit of ₹17.80 crore as against ₹11.63 crore in the same period last year, registering a growth of 53%. The total income rose 21.8% to ₹298.34 crore versus ₹244.89 crore during the period ended December 31, 2021.

Incorporated in 1992, Precision Camshafts is one of the world’s leading manufacturers and suppliers of camshafts, a critical engine component, in the passenger vehicle segment. The company supplies over 150 varieties of camshafts majorly for passenger vehicles. It has 2 plants in Solapur (Maharashtra) and 2 plants in Nashik (Maharashtra). Besides, it has 1 plant in Germany and 1 plant in the Netherlands. Currently, it has a camshaft castings capacity of 11 million units per annum and a machined camshaft capacity of 4 million units per annum.