NSTL Share Price Deep Dive: IPO Performance, ASM List Impact, and Quarterly Results Explained
Welcome! In this article, we’ll delve into the performance of NSTL Company, analyzing its IPO journey, the surprising halt in its momentum, and its latest quarterly financial results. We’ll uncover crucial points that aren’t widely discussed, so stay tuned for a detailed breakdown. For daily IPO and Grey Market Premium updates, remember to subscribe and join our Telegram group (link in comments) for timely information.
NSTL IPO Performance and Initial Listing Gains
NSTL’s IPO saw shares allocated at ₹800 each, eventually listing at ₹880. On its listing day, the company delivered a decent 10% listing gain. The share price made a low of ₹1030 on the listing day but managed to close above this level. The following day, a strong positive momentum led to a 20% upper circuit, with further gains of 15-17% observed. However, this robust momentum surprisingly ceased before the company’s quarterly numbers were announced.
The ASM List Stage 1: Halting NSTL’s Momentum
The primary reason behind the halt in NSTL’s share price momentum is its inclusion in the Additional Surveillance Measure (ASM) List Stage 1 by SEBI. This decision was made because the company demonstrated an almost 80% gain in a short period without a clear underlying reason. SEBI’s objective is to closely observe any operator-driven movements or unusual trading patterns.
Being in the ASM list has significant implications for NSTL shareholders:
- Initially, the company’s upper and lower circuit limits were 20%.
- If unusual momentum persists, it can be moved to ASM List Stage 2, where circuit limits drop to 10%.
- Further continued momentum might lead to ASM List Stage 3, reducing circuit limits to 5%.
- Additionally, processes like BTST (Buy Today Sell Tomorrow) are not possible under these strict surveillance measures.
This inclusion in the ASM List Stage 1 is a major factor contributing to the lack of continued momentum and the subsequent decline in the stock price. From a personal perspective, the speaker notes a strategy of exiting positions when a company is placed on the ASM list.
NSTL Financial Snapshot: Market Cap, Valuation, and Key Ratios
Let’s examine NSTL’s financial health. The company currently boasts a total market capitalization of ₹23,503 crore. While its market cap was around ₹1600 crore at the time of its IPO, it has since grown significantly to its current valuation, placing it squarely in the mid-cap category.
When we look at the valuation, NSTL’s Price-to-Earnings (P/E) ratio stands at 71.7, indicating it is currently overvalued compared to its industry average P/E of 57. Other key ratios include:
- Return on Capital Employed (ROCE): 23.6%
- Return on Equity (ROE): 17.8% (which suggests room for improvement)
- Face Value: ₹2 (which opens the possibility for a future stock split if the company decides).
NSTL Quarterly Results: Revenue Declines Amidst Profit Growth
The company’s recent quarterly numbers present a mixed picture. While there has been a decline in sales revenue – from ₹337 crore to ₹312 crore, and comparing Q1 to Q4, from ₹364 crore to ₹312 crore – the profitability has shown improvement.
Key highlights from the NSTL quarterly results:
- Operating Profit Margin (OPM): Significantly improved from 24% (or 25%) to approximately 30%.
- Other Income: Also increased, from ₹28 crore to ₹31 crore, and currently ₹35 crore.
- Net Profit: Demonstrated consistent improvement quarter-on-quarter and year-on-year, rising from ₹78 crore to ₹83 crore, and then to ₹90 crore.
Despite the healthy growth in net profit, the downturn in sales revenue has negatively impacted the company’s share price momentum.
Growth Outlook and Shareholding Dynamics
NSTL’s growth trajectory is inherently linked to the broader capital market. The company has shown strong growth in the past:
- Sales CAGR: 34% over 5 years, 23% over 3 years, and 12% in the trailing twelve months.
- Compounded Profit Growth: 21% over 5 years, 17% over 3 years, and 25% in the trailing twelve months.
Examining the shareholding pattern:
- Foreign Institutional Investors (FIIs) hold 15.57%.
- Domestic Institutional Investors (DIIs) hold 44.41%.
- Public shareholders account for 40%.
The number of public shareholders currently stands at 1,035,707. However, this number is expected to decrease in the upcoming quarterly update. This is largely because many retail investors, often referred to as ‘weak players,’ exited on the listing day when the expected 15-20% positive movement did not materialize. Others have since found themselves trapped at higher price levels.
NSTL Outlook: Navigating the ASM List and Valuation
For NSTL to regain its momentum, it is crucial for the company to exit the ASM List Stage 1. As long as it remains on this list, the potential for significant price movement will be limited. While a positive market could mitigate steep corrections, a market downturn could lead to further price adjustments.
In terms of valuation, the share price appears attractive at or below ₹700 for a one-year investment horizon. Conversely, if the price is above ₹1200, it is considered overvalued for short-term considerations.
Investment Strategy: It is advisable to wait and watch for the company’s upcoming quarterly numbers and, more importantly, for its removal from the ASM List Stage 1 before making any significant investment plans.
Final Thoughts and Community Engagement
We will continue to monitor NSTL’s performance, discussing further factors that may influence its movement in an upcoming video. Please feel free to share any doubts or queries in the comments section. Also, we’d love to hear your thoughts: between CDSL and NSTL, which company are you preferring for short-term or long-term investment, and why? Your insights will help provide a broader overview for the community.
