The shares of this microcap company surged by around 9 percent in Wednesday’s trading session after receiving an order worth Rs. 10 crores from Coal India for the General Exploration of coal. In just one month the stock has delivered around a 40 percent return to its shareholders.
Price Movement:
With a market capitalization of Rs. 416 crores, the shares of South West Pinnacle Exploration Ltd started Wednesday’s trading session on a flatter note at Rs. 142 compared to its previous close of Rs. 140.71.
During the trading session, the shares hit a high of Rs. 153, gaining around 9 percent and are currently trading at Rs. 152 apiece.
What Happened:
Such a bullish movement in the share price was observed after the company in an exchange filing announced that it had received a letter of award from Central Mine Planning and Design Institute Ltd. (CMPDI), a subsidiary of Coal India Ltd.
The company received the order for General Exploration of Coal ( G 1 Stage ) with related activities in the state of Madhya Pradesh.
The aggregate value of the contract including GST is 1,000.84 lakhs (Rs. 10 crores). The contract is set to be completed within 360 days, which includes a 30-day mobilization period.
Financials:
Looking at the company’s financial performance, the revenue decreased by 35 percent from Rs. 45.01 crores during the March quarter to Rs. 29.43 crores in the June quarter. On the other hand, the net profits declined by 33 percent from Rs. 2.80 crores to Rs. 1.87 crores during the same timeframe.
Infrastructure:
The company owns 36 state-of-the-art drive Hydrostatic drilling rigs with the capability to drill up to a depth of 2,500 meters in all domains and three 2D/3D Digital Seismic Recording systems with 8,500 channels and 7 Vibrosis to conduct Land Seismic surveys for Coal, Oil & Gas.
Order Book:
As per the latest data, the company has an order book of Rs. 222 crores. Further, the company expects the core exploration service business to continue to grow at 20 to 25 percent per annum over the near to medium term.
Company Profile:
Headquartered in Gurgaon, South West Pinnacle Exploration was incorporated in 2006. The company is in the business of drilling and exploration of coal, minerals and coal-bed methane. The company’s client base includes various organizations and government agencies involved in the exploration and mining sectors.
Written By Vaibhav Patil
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