Shares of this LED lights and Solar power products manufacturing company jumped 2 percent in Monday’s trading session after receiving a contract to build charging stations. The shares have delivered a multibagger return of 329 percent to its shareholders in one year.
With a market capitalization of Rs. 1,781 crores, the shares of Servotech Power Systems Ltd started Monday’s trading session on a higher note at Rs. 84 compared to its previous close of Rs. 82.10. During the trading session, the shares hit a high of Rs. 84.50, gaining around 2 percent and are currently trading at Rs. 83.90 apiece.
Such a positive movement in the share price was observed after the company in an exchange filing announced that they had secured a substantial contract from the Nashik Municipal Corporation (NMC). This contract involves Servotech supplying, commissioning, and constructing 20 electric vehicle (EV) charging stations throughout the Nashik Municipal Corporation area.
Furthermore, Servotech will oversee the installation, supply, commissioning, construction and maintenance of EV charging stations, catering to various vehicles and substantially improving Nashik’s EV charging network.
Coming onto the company’s financial statements, the revenue decreased by 26 percent from Rs. 67.12 crores during the September quarter to Rs. 49.65 crores in the December quarter. In addition, the net profits declined by 64 percent from Rs. 3.01 crores to Rs. 1.09 crores during the same period.
Earlier, the company secured strategic equity dilution of 6 percent at a pre-money valuation of Rs. 200 crores. This investment will fuel the initial phase of Servotech EV Infra’s ambitious growth plans. Additionally, Servotech EV Infra will also establish Proof of Concept (POC) sites at 10 strategic locations in North India within 100 days.
Due to increasing operating revenue and profits on a YoY basis, the profitability metrics of the company improved with the return on equity (RoE) increasing from 9.47 percent during FY21-22 to 17.37 percent in FY22-23, and, the return on capital employed (RoCE) zoomed from 12.37 percent to 17.72 percent during the same timeframe. Furthermore, the net profit margin increased from 2.52 percent during FY21-22 to 3.63 percent during FY22-23.
Headquartered in New Delhi, Servotech Power Systems Ltd was incorporated in 2004. The company is engaged in is engaged in manufacturing LED lighting solutions, UPS (uninterruptible power supply) systems, EV charges, inverters, and batteries.
Written By Vaibhav Patil
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