Magellanic Cloud Ltd is a small-cap company that provides IT solutions & human capital, E-surveillance, and Drones Manufacturing & allied services. The stock is listed on the Bombay Stock Exchange (BSE), and gained 4.98% on Tuesday’s early trades to reach an intraday high of ₹ 641.45 apiece.
The stock has given multibagger returns of 881% in the past two years, as its share price increased from ₹ 65 levels to the current level of ₹ 638. Therefore, if an investor would have invested ₹ 1 lakh in the company’s shares two years ago, the value of their holdings would have been ₹ 9.81 lakhs today!
Huge Order
Magellanic Cloud informed the BSE that it has secured an order to provide end-to-end implementation and management of E-surveillance of ATM sites in 8 geographical circles spread across India, through its subsidiary Provigil Surveillance Limited.
This contract was awarded post competitive bidding and it will allow the company to provide surveillance services to 3,032 ATM sites of a well-known Public Sector bank. Magellanic Cloud expects the contract to help it generate revenues to the tune of ₹ 130 million per year for the five-year contract period. Moreover, it is likely to yield healthy profit margins and add a reputable client to its existing list of clientele.
“We are pleased to share a significant order win by our subsidiary Provigil Surveillance Limited from well established PSU Bank. The order comprises of providing end-to-end implementation and management of high-end tech-based Surveillance Equipment in 3,032 ATM sites of the bank in 8 geographical circles spread across India for a period of 5 years. This order-win further strengthens our existing order-book and enhances our dominant position in ATM surveillance space,” the company’s management said.
Bonus Issue
Magellanic Cloud’s board has announced a bonus issue in the ratio of 4:1, i.e., four equity shares of ₹ 10 each fully paid up for every one equity share of ₹ 10 each. The record date for the issue is Wednesday, 22nd March.
Following the above developments, the company’s share price has gained 19.35% in the past five days, as its share price increased from ₹ 534.55 to ₹ 638.00 levels.
Magellanic Cloud Limited has an excellent return on equity of 45.00% but a slightly high debt-to-equity ratio of 1.17. The company’s shares were trading at a price-to-earnings ratio of 29.65 which is slightly higher than the industry average of 26.13, indicating that the stock might be overvalued as compared to its peers.
Written by Simran Bafna
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