Small-cap stock that caters to automotive OEMs (Original equipment manufacturers) industry surged nearly 1.5 percent after securing orders worth Rs.800 crore to supply transfer cases for international markets.
Price Variation
After recently hitting a 52-week low, the shares of Divgi TorqTransfer Systems Limited surged by nearly 1.5 percent to an intra-day high of Rs.687.5 per share from its previous close of Rs.679.2 apiece.
What happened
Divgi TorqTransfer Systems Limited has secured a multi-year contract from a major Indian automotive OEM for its transfer case business. This contract, valued at around Rs.800 crores, involves designing and supplying transfer cases for a commercial pickup truck aimed at international markets. These orders are anticipated to be completed in 7 years.
Execution will start from H2FY27, following product validation and approval. Additionally, the company has received orders worth Rs.200 crores this year from two prominent North American automotive transmission manufacturers for precision forged and machined components.
Management Commentary
Commenting on this achievement Mr. Jitendra Divgi, Managing Director of Divgi TorqTransfer Systems Limited said, “We are happy with this new award for our core transfer case product.
Such a significant award from an existing marquee customer underscores our confidence that this segment will continue to contribute significantly to the Company’s overall growth.
Our Company’s superior technical capabilities have helped us acquire many such orders in the past and as the market grows, we are well-positioned to win many more in the coming years”.
Renowned clientele
Divgi TorqTransfer Systems Limited has a distinguished client portfolio featuring leading companies such as Tata Motors, BorgWarner, Mahindra, Toyota Kirloskar, Ashok Leyland, and Force Motors. They have built strong relationships with these clients over 15 to 20 years, reflecting their long-standing associations.
Financials
Divgi TorqTransfer Systems Limited experienced a challenging quarter ending June 2024. Revenue from operations fell to Rs.54.23 crore, down 4.2 percent from Rs.56.57 crore year-over-year and declining by 17 percent from Rs.65.06 crore in Q4 FY24.
Profit After Tax (PAT) also saw a significant drop, decreasing by 42.85 percent to Rs.5.96 crore from Rs.10.43 crore in the same quarter last year, and a 35.28 percent reduction from Rs.9.21 crore in Q4 FY24.
About the Company
Divgi TorqTransfer Systems Limited is a leader in automotive drivetrain components and solutions, with extensive manufacturing expertise. The company offers torque transfer and transmission solutions to OEMs for utility, passenger, commercial, electric, and agricultural vehicles both in India and internationally.
Written by – Siddesh S Raskar
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