The shares of this smallcap company locked a 10 percent upper circuit after receiving 1.2 MW Solar Energy Storage and Grid-Connected Systems orders from the Rural Development Department and UPNEDA.
Price Movemnet:
With a market capitalization of Rs. 2,791 crores, the shares of Servotech Power Systems Ltd started Wednesday’s trading session on a flatter note at Rs. 122 compared to its previous close of Rs. 120.31.
During the trading session, the shares clocked a 10 percent upper circuit at Rs. 131.39 and also recorded as the company’s fresh 52-week high.
What Happened:
Such a bullish movement in the share price was observed after the company in an exchange filing announced that it had secured a total of 1.2 MW order worth approximately Rs. 10.20 crores for the deployment of Solar Energy Storage and Grid-connected Systems.
The order was been secured from the Rural Development Department of Uttar Pradesh and the Uttar Pradesh New and Renewable Energy Development Agency (UPNEDA).
Servotech will be responsible for installing multiple 75kW solar-based energy storage systems, designed to provide reliable and uninterrupted power supply across Uttar Pradesh.
Additionally, the company will also be designing, manufacturing, supplying, erecting, testing and commissioning 20 kW and 40 kW grid-connected solar power systems, contributing to the state’s renewable energy goals.
Furthermore, the company has previously worked with UPNEDA, where it commissioned and maintained off-grid solar plants of various capacities throughout Uttar Pradesh.
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Financials:
Looking at the company’s financial performance, the revenue decreased by around 18 percent from Rs. 136.17 crores during the March quarter to Rs. 112.19 crores in the June quarter. Contrastingly, the net profits increased by around 30 percent from Rs. 3.46 crores to Rs. 4.49 crores during the same timeframe.
Future Outlook:
Servotech is currently constructing a cutting-edge manufacturing facility focused on the production of essential EV charger components such as power modules, control circuits, and PLCs. This move aims to reduce reliance on imports and position India as a key player in the global EV charger supply chain.
The company aims to become one of the top 3 companies in the next 2 years and is focused on achieving strategic goals and demonstrating results to investors.
Moreover, the company is targeting a revenue of around Rs. 3,500 crores in the next 4-5 years, planning to increase market share, expand product offerings, and expect a significant increase in revenue by 2024.
Important Financial Ratios:
In terms of key financial metrics, the company reported a Return on Equity (RoE) of 8.29 percent and a return on capital employed (RoCE) of 11.87 percent for the period spanning FY23-24. Additionally, during the same period, the net profit margin stood at 3.33 percent.
Company Profile:
Headquartered in New Delhi, Servotech Power Systems Ltd was incorporated in 2004. The company is engaged in is engaged in manufacturing LED lighting solutions, UPS (uninterruptible power supply) systems, EV charges, inverters, and batteries.
Written By Vaibhav Patil
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