Shares of a small-cap company gained 10.26 percent on Tuesday’s early trades to reach an intraday high of ₹ 538.90 apiece on the National Stock Exchange (NSE). This happened after the company bagged an order from Siemens. At 12:08 PM, its shares were trading at ₹ 512.00 apiece.
Elgi Equipments along with its subsidiaries, is engaged in the business of manufacturing and supplying air compressors and automotive equipment. It also provides related after-sales services.
According to an exchange filing, the company has received a letter of award from Siemens for the supply and maintenance of air generation and treatment units and auxiliary compressors. The order is required to be executed by the company over a period of 10 years and requires 35 years of maintenance from the date of supply. It involves 2400 sets of air screw compressors with a dryer package and 1200 auxiliary compressors.
With a market capitalization of ₹ 15,748 crores, Elgi Equipments is a small-cap company. It has a high return on equity of 27.22 percent and an ideal debt-to-equity ratio of 0.42. Its shares were trading at a price-to-earnings ratio (P/E) of 40.46, which is higher than the industry P/E of 33.05, indicating that the stock might be overvalued as compared to its peers.
As per its latest shareholding pattern, retail investors hold a 37.08 percent stake in it, followed by promoters with 31.19 percent, foreign institutions with 28.41 percent, mutual funds with 3.31 percent and other domestic institutions with 0.01 percent.
Written by Simran Bafna
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