Shares of Gujarat Industries Power Company Limited (GIPCL) were locked in the 20 percent upper circuit in the early trading hours and, after releasing from that point, the stock again reached the circuit at Rs 91.10.
The company is held by parent companies which include Gujarat State Fertilizers & Chemicals Ltd, Gujarat Alkalies & Chemicals Ltd, Gujarat Urja Vikas Nigam Ltd, and Petrofils Co-operative Ltd. Stocks of a few of the first two entities mentioned above have shown a huge movement of 16 percent and 12 percent respectively.
Last week, the company’s Board approved the procurement of Imported Coal for a 500 MW Surat Lignite Power Plant. Moreover, it also approved the EPC Contract for Solar / Wind / Hybrid RE Park of 2375 MW capacity in Kutch, Gujarat.
Incorporated in 1985, Gujarat Industries Power is engaged in the business of electrical power generation with a present installed generation capacity of around 1,185 MW.
The company has a diversified portfolio of products which includes gas-based power plants, solar power plants, and thermal power plants. It generates a majority of its revenue from the sale of electrical energy within the domestic markets.
Having a quick glance at the financials of the company, the revenues as well as net profits, on a standalone basis, have improved in recent quarters. Revenues showed a shift from Rs 252 crores in Q2 to Rs 376 crores in Q3. Moreover, the net profits of the company, during the same period, increased from Rs 27 crores to Rs 34 crores.
On the contrary, the profitability metrics have reduced in recent financial years with the return on equity (ROE) going down from 6.42 percent during FY20-21 to 5.81 percent in FY21-22. Likewise, the return on capital employed (ROCE) moved down from 9.18 percent to 8.01 percent, keeping the timeframe the same.
Showing operational efficiencies, the net profit margins have increased from 13.46 percent in FY20-21 to 14.61 percent in FY21-22.
The debt-to-equity ratio of the company has remained constant during the last 2 financial years at 0.17 which is within the desired limits.
According to the latest data available for the March quarter, promoters of the company hold a constant 55.69 percent stake and the Foreign Institutional Investors (FIIs) hold a 2.9 percent stake in the company.
Written by Amit Madnani
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