With a market capitalization of Rs. 1,284 crores, the shares of a leading manufacturer and supplier of electrical and electronic products for the Indian Railways started Friday’s trading session at Rs 1,946.90 apiece.
Financials:
Looking at Concord Control Systems Ltd’s financial statements, the revenue increased by around 17 percent from Rs. 30 crores in H1FY24 to Rs. 35 crores in H2FY24. In addition, the net profits also jumped around 17 percent from Rs. 6 crores to Rs. 7 crores during the same timeframe.
Comparing the same metrics on a YoY basis, the revenue zoomed by 52 percent from Rs. 23 crores during H1FY23 to Rs. 35 crores in H1FY24. On the other hand, the net profits magnified by 133 percent from Rs. 3 crores to Rs. 7 crores during the same period.
Preferential Issue:
Recently, the company’s board of directors approved a proposal to issue 3,18,472 equity shares to the public (non-promoter) category on a preferential basis. Among the intended allottees are prominent investors Ashish Rameshchandra Kacholia and Asha Mukul Agrawal (wife of Mukul Agrawal).
As per the exchange filing, the company’s board approved the preferential issue of 3,18,472 fully paid-up shares of the face value of Rs. 10 each at the issue price of Rs. 1,570, including a security premium of Rs. 1,560, aggregating around Rs. 50 crores.
According to the allottees list published by the company, Mr. Ashish Rameshchandra Kacholia has been offered 76,433 shares or a 1.21 per cent stake. His investment in this allocation will amount to approximately Rs. 12 crores.
Furthermore, Mrs Asha Mukul Agrawal has been offered 95,542 shares or a 1.52 per cent stake and her investment in this allocation will amount to around Rs. 15 crores.
Additionally, the preferential allotment also includes shares allocated to other investors, with Opuleny Advisors and Consultants LLP receiving 70,064 shares, representing a 1.11 percent stake and Everest Finance & Investment Co. obtaining 76,433 shares, which equates to a 1.21 percent stake.
Prominent Investors:
Meanwhile, one of the prominent investors Mukul Agrawal, already had a notable stake in the company, holding 2,40,000 shares or 4.01 percent as of the latest quarter.
Returns:
In March 2024, the stock price was trading at Rs 670 exhibiting a gain of around 207 percent compared to the current price. For example, if someone had invested Rs. 1 lakhs into the company’s stock six months ago, it would have converted to approximately Rs. 3.07 lakhs now.
Railway Product:
Concord Control Systems Ltd. manufactures a diverse array of products for the Indian Railways, including inter-vehicular couplers for electrical connections between coaches, emergency lighting systems that activate during power failures, brushless DC carriage fans, exhaust fans, cable jackets, bellows, and battery chargers for railway electrification systems.
Additionally, the company produces tensile testing machines to ensure the integrity of materials used in railway applications, catering to both coach-related and electrification needs within the railway sector.
Moreover, the company is an approved vendor of the Research Design and Standards Organisation (RDSO), enabling it to supply critical products to the Indian Railways.
Customer Base:
Although Indian Railways remains CCSL’s primary client, the company has been expanding its customer base by supplying railway components to leading industry players, including KEC International, Larsen & Toubro, Kalpataru Power Transmission, Rail Vikas Nigam, Fedders Lloyd Corporation, and Tata Projects.
Future Outlook:
The railway company is targeting significant revenue growth of 40 percent to 50 percent year-over-year for the fiscal year 2025 (FY25) while aiming to maintain EBITDA margins between 23 percent to 25 percent.
With the Indian Railways poised for significant expansion, including new freight corridors and high-speed passenger services, Concord Control Systems is well-positioned to benefit from the anticipated increase in capital expenditure in the railway sector.
Written By Vaibhav Patil
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