Shares of Godawari Power & Ispat (GPIL) have been on a remarkable upward trajectory over the past 13 months, delivering substantial gains for investors. Starting from a trading price of ₹359.60 per share, the company’s stock has surged by an impressive 200%, now trading at ₹1,090 per share. This upward trend has not only brought significant returns in a relatively short period but also underscores the company’s robust performance and investor confidence.
Over the last five years, GPIL’s shares have seen a staggering 1918% increase, showcasing the company’s consistent ability to generate value. Over an eight-year span, the stock’s value has soared by 4640%, marking it a strong market performer. This consistent growth is reflected in the fact that the stock has only closed in the red three times in the last nine calendar years. Notably, the stock delivered exceptional returns of 484% in 2017 and continued its impressive performance with annual returns of 105%, 134%, and 103% in 2020, 2021, and 2023, respectively.
The company’s success is not just limited to its stock performance. GPIL, a prominent player in India’s steel sector and a subsidiary of the Hira Group, has evolved into a fully integrated steel manufacturer. Its operations span across iron ore mining, pellet production, sponge iron, steel billets, ferroalloys, and power generation. This diversification and integration have fortified GPIL’s position in the industry.
Currently, GPIL is expanding its pellet plants’ capacity from 2.70 million tonnes per year (mtpa) to 4.70 mtpa. The company has opted for high-grade pellets over iron ore lumps and blended coal in its sponge iron manufacturing process. According to YES Securities, these high-quality pellets command a price premium of approximately ₹1,000 to ₹1,500 per tonne over standard-grade pellets. The new pellet plant, expected to be operational in early FY26, is projected to add about 1.0 million tonnes of incremental volumes from FY24 onwards, significantly boosting the company’s financial outlook.
GPIL’s strategic expansion doesn’t stop there. The company is also developing a 2.0 mtpa integrated HRC (hot-rolled coils) plant, slated for completion between September 2027 and March 2028. This plant aims to enhance GPIL’s backward integration capabilities, further consolidating its position as one of the nation’s most cost-efficient steel producers.
Financially, GPIL has undergone a significant transformation over the past decade. After peaking in FY2017, the company’s debt levels have seen substantial restructuring. Post-COVID, GPIL has focused on progressive debt repayments, achieving a net-debt-free status on a consolidated basis by the end of FY2022. This healthier balance sheet positions GPIL to invest in new capital projects using internal funds, reducing interest expenses and bolstering cash flows to support future capital expenditures.
In line with these growth prospects, a domestic brokerage firm, YES Securities, has initiated coverage on GPIL with a target price of ₹1,390 per share. This target represents a potential upside of 27.52% from the previous closing price of ₹1,090 per share, highlighting the firm’s confidence in GPIL’s future performance and growth trajectory.
The company’s strategic initiatives, robust financial health, and consistent stock performance make it a compelling player in India’s steel sector. As GPIL continues to expand its capacity and strengthen its integrated operations, it is well-positioned to maintain its growth momentum and deliver value to its shareholders. Investors and market analysts alike will be closely watching GPIL’s next moves as it aims to solidify its standing as a leader in the steel industry.
