Shares of this small-cap company fell around 4 percent in Friday’s trading session after reporting a decline in net profits by 43 percent. The shares have delivered a mutibagger return of 155 percent in one year to its shareholders.
With a market capitalization of Rs. 1,749 crores, the shares of Servotech Power Systems Ltd started Friday’s trading session on a lower note at Rs. 83.10 compared to its previous close of Rs. 85.15. During the trading session, the shares hit a low of Rs. 81, losing around 4 percent and are currently trading at Rs. 81.75 apiece.
Such a negative movement in the share price was observed after the company announced quarterly and financial year ended 31st March 2024 results. Quarterly, the revenue zoomed by 162 percent from Rs. 52 crores during the December quarter to Rs. 136.17 crores in the March quarter. In addition, the net profits magnified by 210 percent from Rs. 1.11 crores to Rs. 3.45 crores during the same period.
Comparing these metrics on a YoY basis, the revenue increased by 18 percent from Rs. 115.30 crores during Q4FY23 to Rs. 136.17 crores in Q4FY24. Contrastingly, the net profits declined by 43 percent from Rs. 6.05 crores to Rs. 3.45 crores during the same timeframe.
On this occasion, Servotech’s Managing Director, Raman Bhatia, commented, “We have increased our manufacturing capacity and have also introduced impactful innovations in EV chargers and solar solutions. Having deployed more than 5,600 EV chargers we are delighted to maintain a strong foothold as a key player in the EV charging industry, holding the potential to capture significant market share in the EV charging solutions segment.”
Earlier, the EV company had announced a collaboration with Electra EVs to create India’s first fast-charging interoperability solutions between GB/T and CCS2 protocols.
Furthermore, the company also secured a substantial contract from the Nashik Municipal Corporation (NMC). This contract involves Servotech supplying, commissioning, and constructing 20 electric vehicle (EV) charging stations throughout the Nashik Municipal Corporation area.
Moreover, the company secured strategic equity dilution of 6 percent at a pre-money valuation of Rs. 200 crores. This investment will fuel the initial phase of Servotech EV Infra’s ambitious growth plans. Additionally, Servotech EV Infra will also establish Proof of Concept (POC) sites at 10 strategic locations in North India within 100 days.
Due to increasing operating revenue and profits on a YoY basis, the profitability metrics of the company improved with the return on equity (RoE) increasing from 9.47 percent during FY21-22 to 17.37 percent in FY22-23, and, the return on capital employed (RoCE) zoomed from 12.37 percent to 17.72 percent during the same timeframe. On the other hand, the net profit margin increased from 2.52 percent during FY21-22 to 3.63 percent during FY22-23.
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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