The shares of this smallcap company locked a 5 percent upper circuit after announcing of expansion into new business segments and product lines. In just six months, the stock has delivered more than 100 percent return to its shareholders.
Price Movement:
With a market capitalization of Rs. 1,423 crores, the shares of RIR Power Electronics Ltd started Monday’s trading session on a higher note at Rs. 1,980 compared to its previous close of Rs. 1,951.25. During the trading session, the shares locked a 5 percent upper circuit at Rs. 2,048 apiece.
What Happened:
Such a bullish movement in the share price was observed after the company in an exchange filing announced its strategic expansion into high growing new business segment with advanced products and solutions.
Further, the company highlighted that it has successfully delivered innovative products and solutions outside of the power sector to new and emerging sectors like Railways, Defence, Clean Energy, Hydrocarbon and Mining.
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Financials:
Looking at the company’s financial performance, the revenue decreased by around 3 percent from Rs. 21.57 crores during the March quarter to Rs. 21.05 crores in the June quarter. On the other hand, the net profits declined by around 18 percent from Rs. 2.78 crores to Rs. 2.28 crores during the same timeframe.
Manufacturing Facility:
The company has a manufacturing facility located in Halol, Gujarat, India. The facility is spread over a total built-up area of 40,000 square feet and includes die fabrication, soldering, encapsulation, and testing capabilities.
Capex:
The company is setting up a Rs. 6,186 million Silicon Carbide (SiC) plant in Odisha, a first of its kind in India, through the help of central government incentive schemes and also state of Odisha incentives.
This plant will create an ecosystem by leveraging vertical integration, securing the supply chain and significantly reducing the dependency on imports of SiC components in India.
Important Financial Ratios:
In terms of key financial metrics, the company reported a Return on Equity (RoE) of 11.18 percent and a return on capital employed (RoCE) of 12.52 percent for the period spanning FY23-24. Furthermore, the net profit margin during FY23-24 was at 10.52 percent.
Company Profile:
RIR Power Electronics Ltd manufactures and sells various power semiconductor devices, including phase control thyristors, standard recovery diodes, fast recovery diodes, power modules, bridge rectifiers, and water-cooled assemblies.
These products are used in a wide range of industries, such as power electronics, which is a crucial component in various applications like power generation, transmission, and distribution, as well as in consumer electronics, automotive systems, and industrial automation.
Written By Vaibhav Patil
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