The shares of this microcap stock locked a 5 percent upper circuit after receiving approval to establish a 50 MW Renewable Energy Park in Rajasthan. The stock has delivered more than 90 percent return to its shareholders in one year.
Price Movement:
With a market capitalization of Rs. 967 crores, the shares of RMC Switchgears Ltd started Wednesday’s trading session on a higher note at Rs. 937.90, locking a 5 percent upper circuit compared to its previous close of Rs. 893.25 apiece.
What Happened:
Such a bullish movement in the share price was observed after the company in an exchange filing announced one of its subsidiary companies, RMC Green Energy Pvt Ltd had secured approval from the Rajasthan Renewable Energy Corporation to establish a 50 MW Renewable Energy Park in Rajasthan under the Rajasthan Renewable Energy Policy 2023.
Additionally, the company is actively seeking tenders larger than 600 MWp and is engaging with both public and private sector organizations to achieve its ambitious goal of securing 1 GWp in EPC contracts over the next 18 months.
Furthermore, this achievement further solidifies the parent company’s entry into the Solar Park industry as a renewable Independent Power Producer (IPP).
On this occasion, Mr Ankit Agrawal, CEO and Whole-Time Director of RMC Switchgears, said: “This approval marks a pivotal step in our journey as we transition into a renewable energy company, with solar plants as IPPs and EPC contracts for solar as our primary focus. Establishing its first 50 MW Renewable Energy Park is a testament to our commitment to participating in the strategic fossil energy substitution within India.”
Financials:
Looking at the company’s financial statements, the revenue decreased by around 2 percent from Rs. 87 crores during H1FY24 to Rs. 85 crores in H2FY24. On the other hand, the net profits declined by around 13 percent from Rs. 8 crores to Rs. 7 crores during the same timeframe.
Important Financial Ratios:
In terms of key financial metrics, the company reported a Return on Equity (RoE) of 24.64 percent and a return on capital employed (RoCE) of 32.69 percent for the period spanning FY22-23. Additionally, the net profit margin stood at 8.62 percent during the same timeframe.
Water Management Segement:
RMC Switchgears Limited has recently made a significant move into the water management sector by establishing a new subsidiary, Intelligent Hydel Solutions Private Limited.
This initiative, announced on February 9, 2024, aims to leverage Internet of Things (IoT) technology to enhance water management practices in India, addressing critical challenges such as water scarcity and inefficient resource management.
Company Profile:
Incorporated in 1994, RMC Switchgears Ltd specializes in the design, manufacturing, and supply of electrical equipment, particularly focused on enhancing electrical safety and efficiency in power distribution.
Written By Vaibhav Patil
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