This smallcap stock soars 68% in 1 month; zooms 105% from March low

Business Standard

2 days ago

Share price of Shankara Building Products today
Shares of Shankara Building Products hit an over six-year high of ₹965, as they rallied 5 per cent on the BSE in Friday's intra-day trade. The stock price of this smallcap company was trading at its highest level since November 2018. It had hit a record high of ₹2,365 on December 5, 2017.
In the past one month, Shankara Building Products has outperformed the market by surging 68 per cent, as compared to 1.9 per cent rise in the BSE Sensex. The stock has bounced back from its March low and zoomed 105 per cent from a level of ₹470 on the BSE.
At 01:44 PM; Shankara Building Products was quoting 2 per cent higher at ₹936.90, as against 0.86 per cent rise in the BSE Sensex. A combined around 270,000 shares changed hands on the NSE and BSE.
Shankara Building Q4 & FY25 performance
The company's steel division posted its highest-ever quarterly and annual volumes, with March quarter (Q4) volumes reaching 2.58 lakh tonnes - a robust 33 per cent year-on-year (YOY) increase. For the full year, Shankara exceeded its ambitious target of 0.8 million tonnes by achieving 8.43 lakh tonnes, reflecting a 5% outperformance.
On the Non-Steel front, the company continued its growth trajectory, reporting a 20 per cent YoY increase in Q4 and an impressive 26 per cent growth for the full year, driven by good performance in CP & Sanitaryware as well as PVC Pipes & Fittings. These achievements are particularly significant given the backdrop of lower steel prices and a subdued building materials market.
Looking ahead, Shankara remains optimistic, aiming to cross the 1 million tonne mark in steel volumes in FY26 while further strengthening its Non-Steel business.
Shankara Building's demerger plan
Shankara Building Products had proposed a demerger of its core business which is retail and trading of building material into its wholly-owned subsidiary Shankara Buildpro Limited.
The company said it felt the need for the demerger to focus better on its many diverse businesses and thereby unlock greater value for the stakeholders. Shankara today is engaged in multiple activities like manufacturing of steel tubes and cold rolled strips, manufacturing color coated profiles for roofing and other sections for general engineering applications. These activities are housed in multiple subsidiaries. The core business of Shankara is organized retailing and distribution of steel products and numerous building materials.
The demerger will result in two entities. Shankara Building Products which will be the legacy company housing the three subsidiaries which are manufacturing entities. The second entity will be Shankara Buildpro which will carry out the current core business of retailing of steel and other building materials.
As per the scheme of arrangement it is proposed that the existing shareholders of Shankara Building Products will be allotted 1:1 shares in the resultant entity. The process is expected to be completed by H1FY26.
Shankara's management on future outlook
The Indian economy is poised to grow at 6.3 per cent for the year 2026. There is an overhang of reciprocal trade tariffs by the US on the global trade and how it will affect the trade and India specifically is not yet known. But despite global uncertainties and downward revisions in growth forecasts for other large economies, India is set to maintain its leadership in global economic growth. However, the current war-like situation with our neighbor could hinder smooth growth in the current fiscal.
Shankara grew 30 per cent by volume in steel, which is 90 per cent of the company's business and about 30 per cent by revenue in the non-steel segment in the financial year ended March 31, 2025.
The real estate and building industry is witnessing reasonable demand in residential and in the commercial sector. This augurs well for the company. The company hopes to sustain a favourable growth momentum in the coming year.
Healthy relationships with suppliers such as JSW Steel Ltd, Steel Authority of India Ltd, AM/NS India, Uttam Value Steel Ltd, APL Apollo Tubes Ltd, Jaquar & Co, Kohler India Corporation Pvt Ltd, ROCA Bathroom Products Pvt Ltd, Somani Ceramics Ltd, Kajaria Ceramics Ltd and Cera Sanitaryware Ltd enable the group to offer a diverse range of building materials and provides a competitive edge, according to CRISIL Ratings.
About Shankara Building Products
Shankara Building Products is one of the largest omni channel market places for building products. The company deals with a large variety of steel material, construction, plumbing and sanitary items, flooring, electrical, roofing and other related products.
The company's retail stores operate under the name "Shankara Buildpro". The company has 138 fulfilment centres which include 92 retail stores, 32 warehouses and 14 processing units spread across all of South India including Goa and Puducherry.
The company has tied up with leading brands for all product categories. JSW, SAIL, APL Apollo, AMNS etc. for steel products. Nippon Paints for painting solutions, water proofing and numerous construction chemicals and related products. Jaquar, Kohler, Parryware and other leading brands for plumbing and bathroom solutions. Kajaria, Somany, Nitco and multiple brands for tiling and surface applications. Shankara also has tied-up with Grindwell Norton Ltd, HP Landmark, Aqua Star for roofing and fabrications accessories