The Indian stock market has seen many multibagger IPOs but few can match the steep rise of Indian Metals & Ferro Alloys Limited (IMFA). This stock has rallied by a staggering 1,800% in the last 5 years and has now caught the attention of Big Bull Dolly Khanna. Mukul Mahavir Agrawal already held a 1.11% stake in the company which translates to INR 36.7 crore.
Dolly Khanna and Mukul Agrawal Buy Big in IMFA
Dolly Khanna, known for her ability to spot hidden gems, bought a 1.2% stake in IMFA in the December 2024 quarter. She holds 6,23,464 shares that are worth around INR 38.3 crore. Her entry in the stock has sparked interest, and people are wondering about IMFA’s long-term prospects.
Mukul Mahavir, another big investor, already held a 1.11% stake which translates to 5,99,329 shares worth INR 36.7 crore. With both these big investors buying in IMFA, retail investors are now asking: Is IMFA the next big wealth creator?
What Does IMFA Do?
Indian Metals and Ferro Alloys was founded in 1961 and is situated in Odisha. IMFA is India’s largest ferrochrome producer with a capacity of 190 MVA. The company operates in mining, power generation and ferroalloy production. The company is also a supplier to global and domestic stainless steel giants like Jindal Stainless, Shah Alloys, POSCO, Marubeni Corporation and Nisshin Steel.
Performance & Financial Growth
IMFA’s financials tell a story of consistent performance and expansion:
- Revenue growth: From INR 693 crore in Q2 FY24 to INR 643.22 crore in Q3 FY25, showing a decline of ~7%.
- Net profit decline: Dropped 20.2% YoY, from INR 107.87 crore to INR 86.13 crore.
- Compounded profit growth: Despite the Q3 decline, it maintains an impressive 66.8% over five years.
- Stock CAGR: 53% annually over the past five years.
- 52-week high & low: INR 998.80 vs INR 538.50, with the stock closing at INR 614.55 as of 13 March 2025.
IMFA shares were trading around 50.93 per share on 25 March 2020. The company reached its all-time high of INR 998.80 per share on 11 December 2024, reflecting a return of 1,861%. Currently, the stock is trading around INR 614.50 per share, 38% below its record high.
Why Are Investors Bullish on IMFA?
- Global Demand for Ferro Alloys: IMFA plays a crucial role in stainless steel production, a sector expected to grow exponentially as infrastructure projects worldwide ramp up.
- Power & Mining Integration: Unlike many competitors, IMFA has an integrated business model, securing its raw materials and energy needs. The company also recently signed a Power Purchase Agreement (PPA) with JSW Green Energy One and JSW Green Energy Seven for 70 MW of hybrid renewable energy (50 MW AC Solar and 100 MW Wind).
- Strong Profitability Metrics: Despite the recent profit dip, long-term financial indicators remain strong. The company’s net profit growth over the past five years and stable cash flows indicate financial strength and resilience.
- Ace Investors’ Confidence: The entry of Dolly Khanna and Mukul Agrawal has increased retail investor confidence, pushing the stock further into the limelight.
ICRA Ratings and Financial Stability
ICRA reaffirmed IMFA’s credit ratings, citing its strong financial profile and sustainable profitability:
- Long Term Fund-Based Loan: [ICRA]AA-(Stable)
- Short Term Non-Fund-Based Facilities: [ICRA]A1+
- Fund-Based Limits: INR 810.96 crore
- Free cash and liquid investments: INR 750 crore as of August 2024
- Debt coverage indicators: Net debt remains negative as of 31 March 2024, indicating a healthy balance sheet.
Key Financial Indicators (FY24):
- Operating Income: INR 2,780 crore
- Profit After Tax (PAT): INR 390.5 crore
- Total Debt/OPBDIT: 0.3x
- Interest Coverage Ratio: 16.3x
IMFA’s integrated operations, including captive chrome ore mines and power generation, give it a cost advantage over competitors. ICRA also noted that ferrochrome prices remain above pre-COVID levels due to rising production costs in China and South Africa.
Key Developments & Leadership Changes
IMFA recently appointed Bijayananda Mohapatra to the Board as Wholetime Director and COO, effective 31 January 2025. Additionally, Saunak Gupta has been designated CFO and took charge on 8 March 2025.
The company is also in final negotiations to award major contracts for its ethanol project, with construction expected to begin soon and a commissioning timeline of 12 months.
Conclusion
While IMFA’s stellar rise and ace investors’ backing make it an exciting opportunity, investors must be cautious. The volatility of commodity stocks and the cyclical nature of the ferroalloy industry mean that timing is crucial. The recent 20% drop in Q3 net profit highlights this risk.
However, IMFA remains fundamentally strong, with solid long-term growth prospects, strategic investments in renewable energy, and cost advantages from its integrated operations. Investors should closely monitor commodity trends and global demand before making investment decisions.
The stock market loves multibaggers, and IMFA has already delivered 18x returns in just five years. With Dolly Khanna and Mukul Agrawal betting on it, investors are wondering whether the next leg of the rally is just beginning.
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