Mishra Dhatu Nigam Limited popularly known as ‘MIDHANI’ stock has increased from Rs 150 to nearly Rs 217 in the last two weeks with the expectation of higher growth in the coming quarters. The stock has surged nearly 152% since it listed on 4 April 2018 with an issue price of Rs 90 a share.
So what is so special about MIDHANI?
The major reason behind the surge in stocks of MIDHANI is its monopoly in supplying ultra-high-strength steel for rockets, satellites, and other equipment to Defence Research & Development Organisation (DRDO), Indian Space Research Organisation (ISRO), Hindustan Aeronautics (HAL), and Department of Atomic Energy (DAE).
And the second major reason is the increase in budget allocation for space programs. Nirmala Sitharaman, Finance Minister, in her latest budget speech, allocated Rs 13,479 crores for space exploration, increasing it to 8% from last year. And MIDHANI receives half of the orders from ISRO; so the growth of ISRO means the growth of MIDHANI.
Also, ICICI Securities in a note to its investors said, “Increase in Indian space expenditure budget has been one of the key tailwinds for MIDHANI (Mishra Dhatu Nigam). Significant expenditure budget CAGR towards space (15.8% CAGR over the past six years), joint product development with Indian Space Research Organisation (ISRO) for strategically important materials, relatively small scale of operations, all tilt the risk reward in favour of MIDHANI.”
Thus, investors can rely on the predicted growth path of stocks of MIDHANI.
Managing director MIDHANI, Dinesh Kumar Likhi recently said that he expects a much better March quarter.
He also added, “So we expect that next year also, the order book will be to the extent of ₹800 crores and with a starting order book of ₹1,500 crores this year, the 1st April ’20, we feel that our growth of next year also will continue in the same pattern.”
Above all, MIDHANI is a PSU, and over 70% of the company’s production is supplied to Indian Space Research Organisation (ISRO), Defence Research & Development Organisation (DRDO), Hindustan Aeronautics (HAL), and Department of Atomic Energy (DAE), and the rest goes to the private companies including Larsen & Toubro and BHEL.
So it seems like a good option to invest in MIDHANI stocks.