Shares of a company holding expertise in the sectors of energy, urban infrastructure, and transportation hit a 5% upper circuit on BSE at Rs. 141.15 in the trading session of Tuesday.
With a market capitalisation of Rs. 10,090 crores, the shares of GMR Power and Urban Infra Limited opened in the green at Rs. 140.95, up by 4.8 percent, compared to its previous closing price of Rs. 134.45.
Brokerage Target:
The domestic brokerage firm B&K Securities initiated a ‘buy’ rating on GMR Power and Urban Infra Limited and assigned a target price of Rs. 184 per share, representing a potential upside of nearly 31 percent from the current trading price of Rs. 141.15.
Also read: NBFC stock jumps 5% after signing MoU worth ₹ 1,964 Mil to set up new plant in J&K
Analysts are optimistic about the company’s prospects, attributing this positive outlook to the government’s renewed focus on thermal power, which is expected to benefit the company’s future growth.
Additionally, B&K Securities noted that GMR Power and Urban Infra is broadening its portfolio by venturing into the smart meter sector.
Brokerage Outlook:
B&K Securities analysts are positive about the company’s strategic shift towards energy generation, utility services, and EV charging.
In the energy segment, GMR Power and Urban Infra boasts an installed power capacity of more than 3 GW, while its operational assets feature the Warora (600 MW) and Kamalanga (1,050 MW) coal plants, and the Bajoli Holi Hydro plant (180 MW).
Additionally, the company owns two gas-based power plants with a total capacity of 1.1 GW, though these are currently idle due to issues with gas supply.
In the Transportation & EPC segment, GMR Power manages three highway projects, covering nearly 730 lane kilometres across Andhra Pradesh, Haryana-Punjab, and Tamil Nadu.
The company has strengthened its energy portfolio (consolidated) by acquiring stakes in GMR Energy, including a 29.14 percent stake from Tenaga Nasional Berhad and an additional 11.66 percent from Claymore Investments.
The thermal power plants of GMR Power, such as Warora and Kamalanga, have demonstrated improved Plant Load Factors (PLF).
The company’s financial health has been enhanced through a successful balance sheet restructuring, reducing debt and improved liquidity, notably through favourable settlements in the Hyderabad-Vijayawada and Chennai Outer Ring Road projects.
Furthermore, the conversion of $275 million in subordinated FCCBs into equity shares in July 2024 has strengthened the capital base of the company.
GMR Power and Urban Infra also has a strong presence in smart metering, highlighted by a major Rs. 7,590 crore contract in Uttar Pradesh.
Looking forward, analysts are confident in the company’s potential to enhance and maintain its financial performance.
Also read: Smallcap stock jumps 5% after announcing record date for 1:1 bonus issue
Financials:
The company experienced significant growth in its revenue from operations, showing a year-on-year rise of around 43.4 percent from Rs. 1,124 crores in Q1FY24 to Rs. 1,612 crores in Q1FY25.
During the same period, the company’s net profit improved significantly, turning around from a loss of Rs. 218 crores to a profit of Rs. 1,362 crores.
This growth in PAT was attributed not only to operational improvements but also to an exceptional gain of Rs. 1,390 crores recorded in Q1FY25, arising mainly from the settlement related to the Hyderabad-Vijayawada Expressways.
On a year-on-year basis, the Earnings Before Interest, Taxes, Depreciation, and Amortisation, or EBITDA increased from Rs. 256.8 crores in Q1 FY24 to Rs. 636 crores in Q1 FY25, registering a growth of 147.7 percent.
Stock Performance:
The stock has delivered multibagger returns of nearly 312.2 percent in one year, as well as around 170 percent returns in the last six months. So far in 2024, the shares of GMR Power and Urban Infra have given about 160 percent of multibagger returns.
About the company:
Incorporated in 2019, GMR Power and Urban Infra Limited is primarily engaged in the business of power generation, coal mining & exploration activities, development of highways, development, operation and maintenance of special economic zones (SEZ), and construction business including Engineering, Procurement and Construction (EPC) contracting activities.
Written by Shivani Singh
Disclaimer
The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Dailyraven Technologies or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
