The shares of this smallcap company jumped around 4 percent in Monday’s trading session after receiving an order worth Rs. 98 crores from the Indian Railways. The stock has delivered more than 150 percent return to its shareholders in one year.
Price Movement:
With a market capitalization of Rs. 1,561 crores, the shares of Hind Rectifiers Ltd started Monday’s trading session on a higher note at Rs. 904.95, compared to its previous close of Rs. 868.90. During the trading session, the shares hit a high of Rs. 912, gaining around 4 percent and are currently trading at Rs. 901 apiece.
What Happened:
Such a bullish movement in the share price was observed after the company in an exchange filing announced that it had secured supply orders from Indian Railways worth over Rs. 98 crores. This contract is expected to be executed by the financial year 2025-26.
As of September 28, 2024, the company now holds the highest backlog of pending orders in its history, amounting to Rs. 867 crores.
Also Read: Infra stock jumps 6% after it wins project worth ₹ 1,990 Cr for tunnel construction
Important Financial Ratios:
In terms of key financial metrics, the company reported a return on equity of 10.04 percent and a return on capital employed of 23.65 percent for the period spanning FY23-24. Additionally, the net profit margin stood at 2.41 percent during the same timeframe.
Railway Sector:
Indian Railways has historically been the backbone of Hind Rectifiers’ business, providing a stable source of revenue through contracts for various electrical components used in locomotives and coaches.
The company’s long-standing relationship with Indian Railways has been bolstered by its commitment to quality and innovation in railway technology.
Furthermore, Hind Rectifiers is investing in research and development to create innovative products tailored for private rolling stock manufacturers.
This includes adapting to newer technologies and designs that meet the evolving needs of the railway sector, such as Distributed Power Rolling Stock (DPRS) systems used in modern trains like the Vande Bharat Express.
Defence sector:
In addition to railway applications, Hind Rectifiers is enhancing its presence in the industrial sector. This involves upgrading existing product lines and developing new solutions that cater to various industries, including power generation, defence, and aerospace.
Moreover, the company has achieved certifications for aerospace standards and registered with defence organizations, which is likely to bring an additional revenue stream in the coming years.
Management Guidance:
As per reports, the company is targeting a 20 percent revenue growth for FY25, aiming to reach approximately Rs. 600 crores, bolstered by new orders.
Furthermore, the management is optimistic about improving operational efficiencies, which could lead to margins expanding into double digits as they leverage their existing product lines without immediate need for additional space.
Prominent Investor:
According to the BSE data, Ace Investor Mr Mukul Agrwal, entering the stock in March 2024, currently holds 2.23 lakh equity shares equivalent to a 1.30 percent stake in this company. The current holding value of his investment amounts to Rs. 20.1 crores.
Company Profile:
Incorporated in April 1958, Hind Rectifiers Ltd. is primarily engaged in developing, designing, manufacturing, and marketing Power semiconductors, Power Electronic equipment, and Railway Transportation equipment.
Also Read: Defence stock jumps 8% after receiving an order worth ₹ 44.49 Cr from Larsen & Toubro
Written By Vaibhav Patil
Disclaimer
The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Dailyraven Technologies or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
