Rama Steel Tubes shares up 20% today. Here’s why

Shares of Rama Steel Tubes Ltd rose by almost 20% on Thursday, continuing the upward momentum from the previous trading session.

The stock touched an intraday high of Rs 13.90 on the Bombay Stock Exchange (BSE), after rising nearly 20% and continuing its 32% rally in the last two sessions.

This followed a strong performance on Wednesday when shares rose 10%.

The sharp rise in the value of Rama Steel Tubes shares is attributed to two main events.

First, the company announced a strategic partnership with Onix Renewable Ltd. to supply steel structures and single-axis trackers for solar projects.

They plan to expand into dual-axis trackers in the future. This partnership marks the company’s entry into the green energy space, which has been well-received by investors.

Rama Steel has developed specialist steel structures and guide tubes that are critical to the long-term success of solar projects.

“We are proud to announce our entry into the Green Energy segment and are committed to delivering products that deliver the highest standards of reliability, durability and performance,” said CEO Richi Bansal, highlighting the positive impact on the company’s bottom line and presence in the renewable energy sector.

Apart from this partnership, another significant catalyst for the share price appreciation was the formation of a wholly owned subsidiary of the company, Rama Defence Private Limited, which will focus on defence and related security equipment.

The company received its certificate of incorporation on September 2, 2024, adding a new dimension to its business portfolio. Following this announcement, the shares have already gained 10.17% in the previous session.

This growth momentum has seen the stock gain in value in 2024, posting a year-on-year gain of 6%. Over the past three years, Rama Steel Tubes has achieved a return on investment of 330% and over five years its value has increased by an impressive 1,715%, making it a true multibagger.

Today’s exchange saw heavy volumes with 3.89 crore shares changing hands, resulting in a turnover of Rs 51.19 crore.

The company’s market capitalisation on the BSE rose to Rs 2,059 crore.

Technically speaking, the stock’s Relative Strength Index (RSI) is 60.5, which means the company is neither overbought nor oversold, and its prices are trading higher than several key moving averages, including the 5-day, 10-day, 50-day, and 200-day.

Rama Steel Tubes, a leading manufacturer of steel products such as hot rolled pipes, GI pipes and hollow sections, continues to strengthen its position in the renewable energy and defence sectors, laying the foundation for long-term growth.