Shares of this micro-cap stock associated with the ‘coal’ industry hit the 5 percent upper circuit in Monday’s trading session after the company successfully received an order worth Rs 7.36 crores for core drilling work.
With a market capitalization of Rs 493.31 crores, the stocks of South West Pinnacle Exploration Limited opened their trading session on Monday at Rs 174.90 and are currently locked in the 5 percent upper circuit at Rs 176.80. The company’s stock is inching towards the 52-week high price, viz, Rs 191.95.
Such sharp movements in the company’s stock were witnessed after the company, through a regulatory filing with the Bombay Stock Exchange (BSE), intimated that it has received a work order from M/s Mineral Exploration and Consultancy Limited, Nagpur.
The order pertains to core drilling work of coal in the Chatra district of Jharkhand state. The aggregate value of the contract is approximately Rs 7.36 crores (including GST). The order is a short-duration project that is expected to be completed by June 2024.
During the recent financial quarters, the company reported an increase in its prime indicators of business such as operating revenues and net profits. The former shifted up marginally from Rs 22.98 crores during Q1FY23-24 to Rs 23.27 crores during Q2FY23-24, and, the latter, keeping the timeframe the same, rose from Rs 36 lakhs to Rs 97 lakhs.
Due to underperformance on an annual basis, the basic profitability metrics of the company dipped with the return on equity (RoE) reducing from 10.97 percent during FY21-22 to 8.20 percent during FY22-23 and the return on capital employed (RoCE), during the same period, moved down from 13.64 percent to 10.75 percent.
As per the latest shareholding pattern for the September 2023 quarter, the company’s Promoters hold a 74.68 percent stake and the Public (retail) investors hold a 25.24 percent stake in the company.
Incorporated in 2006, South West Pinnacle Exploration Limited is engaged in the business of providing drilling, exploration, and other associated services to various industries including coal, ferrous, nonferrous, atomic & base metal mining, and unconventional energy. The company also provides aquifer mapping, seismic exploration, and other services.
Written by Amit Madnani
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