Shares of this microcap company surged 11 percent in Tuesday’s trading session after signing a licensing agreement for a compressed biogas purification system.
Price Movement:
With a market capitalization of Rs. 192 crores, the shares of Organic Recycling Systems Ltd (ORSL) started Tuesday’s trading session on a flatter note at Rs. 238 compared to its previous close of Rs. 239.50. During the trading session, the share hit a high of Rs. 274, gaining around 11 percent and closed the day at Rs. 265 apiece.
What Happened:
Such a bullish movement in the share price was observed after the company in an exchange filing announced that it had entered into an Agreement with the Council of Scientific & Industrial Research-Indian Institute of Petroleum (CSIR-IIP) to license and implement the cutting-edge Vacuum Swing Adsorption (VSA) Technology for upgrading raw biogas to compressed biogas (CBG).
Under this agreement, CSIR-IIP will transfer its indigenously developed VSA Technology to ORSL. This technology is designed to process 350 m³/h of raw biogas, converting it into pipeline-quality bio-methane.
Furthermore, the company mentioned that the technology can cater to a wide range of applications, providing a reliable and customizable solution for biogas upgrades. The CBG produced through this technology can be used as a fuel for industrial applications and as an alternative to compressed natural gas (CNG) in vehicular applications.
The agreement outlines the modalities for the grant of a non-exclusive license to ORSL, allowing the company to utilize the VSA Technology for the said biogas processing, encouraging the utilization and application of indigenized technologies, fostering self-reliance and boosting the domestic capabilities within the biogas sector.
Financials:
Looking at the company’s financial statements, the revenue jumped by 19 percent from Rs. 12.57 crores during H1FY24 to Rs. 14.91 crores in H2FY24. In addition, the net profits magnified by 186 percent from Rs. 2.01 crores to Rs. 5.75 crores during the same period.
Recent Developments:
The company has entered into various Memoranda of Understanding (MoUs), one of which is with Sardar Swaran Singh – National Institute of Bioenergy. This MoU aims to establish a pilot project for producing microbial culture to enhance biogas production from Napier grass, a significant feedstock for compressed biogas initiatives.
In addition, the consulting division of the company has commenced commercial activities, receiving mandates to prepare detailed feasibility reports for Public Sector Undertakings (PSUs) and project developers involved in the development and establishment of projects converting waste into compressed biogas.
Important Financial Ratios:
In terms of key financial metrics, the company reported a Return on Equity (RoE) of 9.52 percent and a return on capital employed (RoCE) of 6.44 percent for the period spanning FY23-24. Additionally, during the same timeframe, the net profit margin stood at 28.26 percent.
Company Profile:
Headquartered in Maharashtra, Organic Recycling Systems was incorporated in 2008. It is an engineering company focused on environmental solutions and providing waste management solutions across waste types and across the value chain.
Written By Vaibhav Patil
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