Stock to buy: Shares of Ratnaveer Precision Engineering Limited ended 7% lower on Friday. The steep correction in the small cap stock was followed by a sharp rally in the stock over the past two trading sessions. The Gujarat-headquartered manufacturer is likely to benefit from its backward integrated operation, improving credit profile and solar manufacturing hardware, according to Choice Equity Broking, which sees a 27.8% upside potential in the stock.
The company, on Thursday, had announced that its ₹329.99 crore rights issue closed with an overall subscription of 1.11x. The rights issue included 1,24,99,669 fully paid-up equity shares at ₹264 per share. These rights equity shares will be credited to demat accounts and listed on the NSE and BSE on September 15 after allotment finalisation.
The stock is trading at a modest premium justified by the “step-change in business mix and first-mover positioning,” highlighted Choice Equity Broking in its report. The company’s revenue growth will be determined by a host of factors including revenue momentum in the existing verticals, step-up in finance cost and depreciation, and the pace at which receivables are collected.
The rights issue proceeds should reduce reliance on working-capital borrowing, partly offsetting the interest step-up, as per the brokerage report. Import substitution in electronic components under ECMS, PLI, solar hardware demand, supply-chain diversification under China+1 are likely to favour the company growth.
The company entered into electronic materials with the ECMS-approved FR-4 Copper Clad Laminate (CCL) project at Alindra, Savli, Vadodara in FY26. The entry will make it one of India's first fully integrated CCL facilities and help in targeting a domestic market that is over 90% import-dependent.