Shares of this small-cap company jumped 2 percent in Friday’s trading session after receiving an order worth Rs. 5.48 crores from Garden Reach Shipbuilders. The shares have delivered a multibagger return of 323 percent to its shareholders in one year.
With a market capitalization of Rs. 2,760 crores, the shares of Avantel Ltd started Friday’s trading session positively at Rs. 113 compared to its previous close of Rs. 112.35. During the trading session, the shares hit a high of Rs. 117.45, gaining around 2 percent and are currently trading at Rs. 113 apiece.
Such a positive movement in the share price was observed after the company in an exchange filing announced that it had received a purchase order worth Rs.5.48 crores for the manufacturing and supply of a 1 KW HF System from Garden Reach Shipbuilders.
The High Frequency (HF) System serves a crucial purpose in maritime communications. It facilitates highly secured, seamless, long-range communications over satellite and the HF medium for net-centric operations of Defence Forces on both land and high seas. Additionally, it ensures efficient communication between ships, submarines, aircraft, and helicopters, thereby enhancing operational capabilities and situational awareness.
Looking at the company’s recent financial statements, the revenue increased by around 10 percent from Rs. 54.33 crores during the September quarter to Rs. 59.33 crores in the December quarter. In addition, the net profits marginally increased by around 2 percent from Rs. 16.07 crores to Rs. 16.32 crores during the same timeframe.
Earlier, in January, the company received a purchase order worth Rs. 5.48 crores from Hindustan Shipyard for the supply of Satcom Equipment. And also received an order from the Ministry of Defence for the development and manufacture of Satcom Baseband equipment (LDPC) for Cband Hub, worth Rs. 5.30 crores.
Due to consistent operating revenue and profits on a YoY basis, the profitability metrics of the company improved with the return on equity (RoE) increasing from 22.90 percent during FY 21-22 to 26.84 percent in FY 22-23, and, the return on capital employed (RoCE) zoomed from 28.67 percent to 38.79 percent during the same timeframe. Furthermore, the net profit margin increased from 18.27 percent during FY21-22 to 19.47 percent during FY22-23.
According to the latest shareholding pattern, the Promoters hold 40.10 percent of shares, Retail investors have 59.89 percent stake and the remaining 0.01 percent of shares are with the DIIs.
Headquartered in Hyderabad, Avantel Ltd was incorporated in 1990. The company is engaged in the business of designing, developing and maintaining wireless and satellite communication products, defence electronics, radar systems and the development of network management software applications for its customers majorly from the aerospace and defence sectors.
Written By Vaibhav Patil
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