Gallantt Ispat rises 13%

Gallantt Ispat is among the top gainers on the BSE today, rising 12.65% to Rs. 638.85. The stock opened at Rs. 573.35 against its previous close of Rs. 567.10 and touched an intraday high of Rs. 642.50. Volumes were strong, with 5.39 lakh shares traded against a two-week average of 2.59 lakh shares, while turnover stood at Rs. 33.49 crore. Market depth was almost balanced, with buy quantity at 73,983 shares against sell quantity of 69,005, suggesting buying interest despite the sharp rally.

Trigger

• Strong momentum buying continues after the stock surged over 15% on October 12.
• The company is undertaking a Rs. 3,000 crore expansion programme, targeting an increase in finished-steel capacity from 1 million tonnes to approximately 1.29 million tonnes annually by H2 FY27.
• Planned captive iron ore mining operations could improve raw-material security and margins.
• Q2 FY27 results are scheduled for October 19, with investors watching for updates on expansion and profitability.
• Following an exchange query on unusually high trading volumes, the company clarified on October 13 that it had no undisclosed material information and considered the movement market-driven.

The rally appears to be driven more by momentum and expectations around capacity expansion than by a fresh corporate announcement. Gallantt's integrated steel operations, captive power facilities and planned iron ore mines could improve cost competitiveness. Management has indicated that captive mines, once operational, could potentially improve EBITDA by around Rs. 2,000 per tonne.

However, the immediate financial picture is less encouraging. In Q1 FY27, standalone revenue rose just 2% YoY to Rs. 1,146 crore, while EBITDA fell 20% to Rs. 203 crore and net profit declined 29% to Rs. 124 crore. Margins contracted due to higher input costs and a planned maintenance shutdown. This makes the upcoming September-quarter results particularly important.

At Rs. 638.85, the stock trades at around 35x consolidated PE, with market capitalisation of Rs. 15,414 crore. It also remains well below its 52-week high of Rs. 946.70. While expansion offers longer-term growth potential, the present rally looks largely momentum-driven.