The shares of the exploration services provider gained up to 10 percent after the company received a letter of award for Imparting services of Passive Seismic Tomography (PST) worth Rs 60 crore.
With a market capitalization of Rs 438.07 crore, the shares of South West Pinnacle Exploration Ltd were trading at Rs 157.00 per share, increasing around 8 percent as compared to the previous closing price of Rs 145.75 apiece.
Reason for rise:-
The shares of the company have seen bullish movement after South West Pinnacle Exploration Ltd received a letter of award from Oil India Ltd (OIL) for imparting services of exploration of oil and gas through Passive Seismic Tomography( PST) in North Eastern Part of India. The value of this order is Rs 60 crore.
Financial performance:-
Analyzing the company’s financial condition, revenue ramped up by 17 percent from Rs 23.27 crore in Q2FY24 to Rs 27.35 crore in Q2FY25, during the same time frame net profit decreased by 68 percent from Rs 0.97 crore to Rs 0.31 crore.
Offer service:-
The company offers a range of services, including aquifer mapping, CBM exploration and production, mining, coal and mineral drilling, geological and geophysical services, 2D/3D seismic exploration, and workover rig services to support resource extraction and energy production.
Clientele:-
Clientele includes Oil India, CMPDI, Central Ground Water Board, Directorate of Geology, Dept. of Mines, SAIL, NMDC, Odisha Lift Irrigation Corporation, Odisha Mineral Corporation, Mineral Exploration Corporation, Geological Survey of India, Hindustan Zinc, JSW Steel, ArcelorMittal, Vedanta, Reliance, and Hindalco.
Capex plan:-
The company was awarded a coal block in Jharkhand and plans to start production by FY26, with a capex of ₹200 crore for approvals, equipment, land, and infrastructure. FY24 capex is ₹20-25 crore, funded through debt, FPO, QIP, or internal accruals.
International project:-
The company operates two rigs in Oman for exploration and drilling and formed a JV, Alara Resources LLC, with Alara Oman Operations, Southwest Pinnacle Exploration, and Al Tasnim. The JV secured an 11-year, $125 million copper mining contract, outsourced to Al Tasnim.
Ratio analysis:-
The company’s critical ratios show that the return on equity decreased from 7.88 percent in FY22-23 to 6.80 percent in FY23-24, while the return on capital employed decreased from 12.80 percent to 11.59 percent. The net profit margin (NPM) for fiscal year 23-24 is 5.34 percent.
Shareholding pattern:-
In the company’s recent shareholding pattern, the Promoters of the company own 73.61 percent while Retail shareholders own a 26.02 percent stake in the company and Foreign Institutional Investors own a 0.36 percent stake.
Company Profile:-
South West Pinnacle Exploration Limited is an India-based exploration services company. The Company is engaged in providing end-to-end drilling, exploration, and allied services to coal, ferrous, non-ferrous, atomic, and base metal mining industries and water and unconventional energy industries.
Written by:- Abhishek Singh
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