Already up 86% in 6 months, ICICI Direct still sees another 39% upside in this small-cap stock - Check target, rationale
Small-cap stock GEE Ltd, a manufacturer of welding consumables, has emerged as a conviction pick for ICICI Direct, which has initiated coverage on the stock with a Buy rating and a target price of ₹170. The brokerage's target implies an upside of 37% from the current market price of ₹124, over a 12-month period.
In its recent research report, ICICI Direct said the company was positioned for an earnings recovery driven by capacity expansion, improving utilisation, specialised welding products and opportunities in nuclear power and defence shipbuilding. The brokerage also expects a sharp improvement in profitability over FY26-FY28, supported by operating leverage and a gradual shift towards higher-value products.
“GEE is well positioned to deliver a strong earnings recovery, supported by the expansion of installed capacity from 59,075 MTPA to 71,339 MTPA and improving utilisation of its existing manufacturing facilities,” ICICI Direct said in its research report.
In today's trading session, the stock rose 3.5% to ₹126.65 apiece on the BSE. It had touched a 52-week high of ₹143.05 in September 2026 and a 52-week low of ₹53.61 in March 2026.
The small-cap stock has gained 8% over the past week and three months, surged 86% in five months, and advanced 38% over the past year.
ICICI Direct identified capacity expansion and better utilisation of existing manufacturing facilities as key drivers of GEE's growth. The company's capacity utilisation improved from 48% in FY25 to 57% in FY26, and the brokerage expects it to rise to 60% in FY27 and 74% in FY28.
The brokerage said GEE's expanded manufacturing base could support revenue potential of around ₹850 crore at mature utilisation levels. The company plans capital expenditure of ₹30-40 crore over the next three to four years, including ₹5-10 crore in FY27, to enhance capacity and improve operational efficiency.
Product diversification is another growth driver. GEE is expanding beyond conventional welding electrodes and wires into submerged arc welding (SAW) wires and fluxes, flux-cored wires, stainless-steel wires and specialised alloy consumables. These products cater to applications in heavy engineering, infrastructure, power equipment, nuclear energy, railways and shipbuilding.
“Currently, around 27–30% of revenue comes from niche products, with the balance largely comprising commodity products. The company is expanding into SAW wires and flux, flux-cored wires, stainless-steel wires, nickel/exotic alloys, maintenance welding products and other specialised consumables,” ICICI Direct said.
The brokerage also highlighted GEE's entry into specialised nuclear and defence applications. The company's approval from the Nuclear Power Corporation of India (NPCIL) strengthens its access to the nuclear power segment, where technical qualifications create entry barriers. ICICI Direct noted that management expects nuclear-related business to contribute around 10% of revenue over time.
GEE has also supplied welding consumables for Indian Navy platforms INS Dunagiri, INS Agray and INS Sanshodhak. Shipbuilding-related opportunities could contribute around 3-5% of revenue as flux-cored wire consumption increases, although the timing will depend on order conversion and execution.
The report also pointed to potential value unlocking from GEE's Thane land parcel. A development agreement could generate more than ₹400 crore over five years, based on indicative realisations, with a potential inflow of ₹40-50 crore in FY27. Actual proceeds would depend on project execution, sales and associated costs.
Key risks include sharp increases in raw material prices that cannot be passed on to customers, competition from domestic and international manufacturers, and pressure on margins from pricing competition.
ICICI Direct expects GEE's revenue to rise from ₹369 crore in FY26 to ₹493 crore in FY27 and ₹614 crore in FY28. This represents a compound annual growth rate (CAGR) of approximately 29% over FY26-FY28, supported by higher capacity utilisation, expanded manufacturing capacity and contributions from specialised products.
The brokerage expects EBITDA to increase from ₹33 crore in FY26 to ₹45 crore in FY27 and ₹61 crore in FY28. EBITDA margins are projected to improve from 9% in FY26 to 9.2% in FY27 and 10% in FY28 as higher volumes, operating leverage and a richer product mix support profitability.
“We estimate EBITDA to grow at a CAGR of ~36% over FY26–28E to ₹61 crore, with margins improving to 9.2% in FY27E and 10.0% in FY28E, driven by higher capacity utilization and operating leverage,” ICICI Direct said.
Net profit is projected to increase from ₹13 crore in FY26 to ₹24 crore in FY27 and ₹36 crore in FY28. This implies a profit CAGR of approximately 66% over the two-year period. Earnings per share are estimated to rise from ₹2.5 in FY26 to ₹4.7 in FY27 and ₹6.9 in FY28.
Pranati Deva is a seasoned financial journalist with over a decade of experience in high-pressure newsroom environments, currently working as a Senior Sub Editor at LiveMint. Over the years, she has developed a reputation for sharp editorial judgement, a strong grasp of market dynamics, and the ability to translate complex financial developments into clear, engaging stories for a wide audience. <br><br> Her core areas of coverage include stock markets, leading listed companies, currencies, and commodities, with a particular strength in fast-paced, real-time market reporting. She is known for handling breaking market news, earnings-driven stock movements, and macroeconomic developments with speed, accuracy, and context—qualities that are essential in financial journalism. <br><br> Pranati has built a diverse and credible professional track record across some of India’s most respected news organisations, including MintGenie, CNBC-TV18, Business Standard and EconomicTimes.com. During her stints at these platforms, she produced data-driven market stories, curated and steered live blogs during volatile trading sessions, and conducted interviews with market veterans, fund managers, economists, and industry experts. Her work often combines on-ground reporting with analytical depth, helping readers make sense of daily market fluctuations and longer-term trends. An alumnus of the Symbiosis Institute of Media and Communications and Hansraj College, University of Delhi, Pranati brings a strong academic foundation to her journalism. She specialises in real-time financial reporting, with a keen focus on precision, balance, and insight, aiming to decode market movements in a way that is both informative and accessible to readers across experience levels.
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HomeMarketsStock MarketsAlready up 86% in 6 months, ICICI Direct still sees another 39% upside in this small-cap stock - Check target, rationale
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