Magnus Steel surges on 491% profit jump despite 69% three-month slide
Magnus Steel and Infra surged to the 5% upper circuit after a near-fivefold increase in first-quarter profit, though the Indian micro-cap remains deep in a correction as it awaits exchange approval for a ₹40 crore rights issue.
Magnus Steel and Infra shares hit the 5% upper circuit on the BSE on 23 July after the company reported a sharp increase in earnings for the quarter ended 30 June 2026.
Net profit rose 490.6% year-on-year to ₹241.13 lakh, up from ₹40.83 lakh in the same period last year. Revenue from operations climbed 273.7% to ₹730.25 lakh, driven by what the company described as higher business activity.
The bottom line benefited from cost control and a zero tax expense. Total expenses fell to ₹489.12 lakh from ₹561.39 lakh in the preceding March quarter. The company paid no tax due to carried-forward and current losses, leaving profit before tax equal to the net figure at ₹241.13 lakh.
Alongside the earnings, the company is navigating a capital raise. Earlier in July, the board approved a proposal to raise up to ₹40 crore through a rights issue of equity shares with a face value of ₹10 each.
However, the Rights Issue Committee has deferred a key meeting originally scheduled for 21 July. The gathering will now take place the working day after the company receives in-principle approval from the stock exchange, which is needed to finalise the record date, issue price and entitlement ratio.
The trading action underscores the extreme volatility typical of Indian micro-caps. While the stock opened at ₹52.03 on Thursday before hitting its circuit limit, it remains deep in a severe drawdown from recent peaks.
Over the past three months, shares have plummeted 69.14%, including a 37.90% drop in the last month alone. This sharp correction follows a staggering 912.45% rally over the preceding 12 months.
For investors, the earnings beat offers a temporary floor, but the heavy recent selling and delayed capital raise highlight the structural risks of betting on highly speculative, low-liquidity names. The proposed rights issue is intended to strengthen the company's financial position and augment its capital base, leaving the stock's medium-term trajectory dependent on both exchange approval and the company's ability to sustain its sudden revenue growth.
