Shares of this small-cap stock associated with industrial equipment jumped approximately 3 percent in Monday’s trading session after the company bagged an order worth Rs 364 crores from Tamil Nadu Generation and Distribution Corporation Limited (TANGEDCO).
With a market capitalization of Rs 1,664.40 crores, the stocks of Salasar Techno Engineering Limited (STEL) opened their trading hour on Monday at Rs 54.61 and currently trades at Rs 52.72, gaining around 3 percent as compared to the previous closing levels of Rs 51.11 apiece.
Such bullish behavior around the stock price was observed after the company, in an exchange filing, intimated the receipt of an Engineering, Procurement, and Construction (EPC) contract from TANGEDCO worth ₹364 crores.
Under the contract, STEL will supply, erect, and Install high-voltage distribution systems, feder segregation, separation of double distribution transformers, and augmentation of 33KV Lines. Strengthening the order book of the company, the above order is expected to be executed within 36 months.
“The contract underscores our commitment to excellence and our ability to provide end-to-end solutions for complex electrical infrastructure initiatives.”, commented the management team of STEL after winning the order.
In the recent budget discussion, the Indian Government has expanded the compensation to service providers to create and augment Telecom Infrastructure from Rs 8,000 crores to Rs 9,000 crores. Moreover, ICRA, one of the well-known rating agencies in India, estimates an investment outlay of Rs 6-8 Trillion at an all-India level in transmission till FY29.
As a result, STEL expects a surge in steel demand to intensify with the commencement of new projects in the future years giving the company good revenue visibility.
During the recent financial quarters, the company has been successful in increasing its operating revenues from Rs 261.86 crores during Q1FY23-24 to Rs 275.35 crores during Q2FY23-24. Due to a bit of increased cost pressure, the company reported a marginal dip in the bottom-line numbers from Rs 10.15 crores to Rs 9.05 crores.
Salasar Techno Engineering Limited is engaged in manufacturing galvanized steel structures and other activities. The firm has two segments namely, steel structure, deriving the majority of revenue, that manufactures and sells galvanized and non-galvanized steel structures, and, EPC projects, comprising the survey, design, erection, etc on a turnkey basis.
Written by Amit Madnani
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