Salzer Electronics Stock Rockets 160% in 2024, Surges 960% in 4 Years – Is This the Multibagger You’ve Been Waiting For?

Shareholders of Salzer Electronics have plenty to celebrate as the company’s stock has reached new record highs. Even during periods of market uncertainty, the shares have shown strength, bouncing back quickly after small dips.

Four years ago, Salzer’s stock was trading at ₹100 per share. Today, it’s valued at ₹1,062, representing an incredible 962% gain. In 2024 alone, the stock has surged 163%, marking its best year since its listing in 2015. From its all-time low of ₹54.30, the stock has skyrocketed nearly 1,900%.

Since 2020, the stock has posted strong returns every year, with gains of 18% in 2020, 48% in 2021, 29% in 2022, and 64.84% in 2023.

Salzer’s Business and Growth

Salzer Electronics, based in Tamil Nadu, operates in four key areas: industrial switchgear, wires & cables, building management, and energy management. It holds a significant market share in India, with 25% of CAM-operated rotary switches and 20% of wire ducts. The company exports to 50 countries and benefits from access to L&T’s distribution network, supported by over 350 distributors.

In FY24, exports made up 26.9% of the company’s total revenue. The company’s industrial switchgear division contributed the most to revenue, with 54.7%, followed by wires & cables at 39.5%, and building products at 5.9%. The industrial switchgear segment has seen consistent growth, increasing its share from 44.8% in FY20 to 54.7% in FY24. Analysts expect this division to continue growing due to rising demand for reliable systems and HVDC technology in the transmission and distribution sector.

Future Growth Opportunities

Salzer Electronics is also expanding into the smart meter business. It has set up a backward-integrated facility with a production capacity of 40 lakh meters, which could generate an additional ₹1,000 crore in annual revenue. The company plans to increase capacity to one crore meters in the coming years.

The company is well-positioned to benefit from India’s growing infrastructure, engineering, and power distribution needs. With long-term partnerships with key clients like L&T, GE, Schneider, and Indian Railways, Salzer is in a strong position to meet increasing demand for its products.

Impressive Financial Growth

Salzer has delivered a compound annual growth rate (CAGR) of 16.9% over the past decade. Its switchgear and wires & cables divisions have grown at 24.9% and 13.8% CAGR, respectively, between FY20 and FY24. The smart meter business also adds to the company’s revenue potential, and analysts expect margins and returns to improve as raw material prices stabilize.

Stock Price Outlook

In July, brokerage firms recommended buying Salzer’s stock for the short term, with a target price of ₹1,080. However, the stock exceeded expectations, reaching a new high of ₹1,142 on August 30, well ahead of the predicted timeline.

With solid growth in its core business and new ventures like smart meters, Salzer Electronics looks well-positioned for continued success in the coming years.