Shares of this smallcap company locked a 5 percent upper circuit after signing a licensing agreement with the Ministry of Defence. In just six months the shares have delivered a multibagger return of 175 percent to its shareholders.
With a market capitalization of Rs. 2,067 crores, the shares of NIBE Ltd started Tuesday’s trading session on a higher note at Rs. 1,539.95 compared to its previous close of Rs. 1,499.10. During the trading session, the shares clocked a 5 percent upper circuit at Rs. 1,574.05 apiece.
Such a bullish movement in the share price was observed after the company in an exchange filing announced that they had entered into a Licensing Agreement with Vehicles Research and Development Establishment (VRDE), Ahmednagar, Defence Research and Development Organisation (DRDO), Ministry of Defence, Government of India for Transfer of Technology to manufacture and sell Anti-Terrorist Vehicle (ATV) in India to Indian Armed Forces/Other Govt. Agencies (Central and State).
Looking at the company’s financial statements, the revenue zoomed by 52 percent from Rs. 41.18 crores during the September quarter to Rs. 62.69 crores in the December quarter. In addition, the net profits surged by 58 percent from Rs. 2.8 crores to Rs. 4.41 crores during the same period.
Earlier, the company’s subsidiary received a purchase order from Ordefence Systems Limited for assemblies, sub-assemblies and supply of 12 kits of small arms for a total consideration of over Rs. 307 crores.
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 1.99 percent during FY 21-22 to 5.89 percent in FY 22-23, and, the return on capital employed (RoCE) zoomed from 3.86 percent to 9.02 percent during the same timeframe. Furthermore, the net profit margin increased from 1 percent during FY21-22 to 4.35 percent during FY22-23.
The company has strategically expanded its operations and has already set up two plants and one more plant is going to be operational in the coming years. All the 3 plants are within the MIDC area of Chakan.
The plant 1 is dedicated to serving L&T Defence, underlining the company’s commitment to delivering high-quality products and services in this sector. Plant 2 is dedicated to the production of heavy fabricated structures and machinery.
According to the latest shareholding pattern, the promoters hold 49.96 percent of the shares, foreign institutional investors (FIIs) have a stake of 11.03 percent, domestic institutional investors (DIIs) own 0.78 percent, and the remaining 38.23 percent is held by retail investors.
Incorporated in 2005, Nibe Ltd is engaged in the business of Fabrication and Machining of components used in the Defence Sector as well as the assembly of components of e-vehicles. It also offers strategic products and related research advancements in the E-Vehicles division and the BVM R&D Foundation.
Written By Vaibhav Patil
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