The shares of the exploration services provider gained up to 3 percent after the company received two Letters of Intimation (LOI) from M/s Odisha Lift Irrigation Corporation Limited
With a market capitalization of Rs 384.08 crore, the shares of South West Pinnacle Exploration Ltd were trading at Rs 137.65 per share, increasing around 8 percent as compared to the previous closing price of Rs 136.35 apiece.
Reason for rise
The shares of the company have seen bullish movement after South West Pinnacle Exploration Ltd received two Letters of Intimation (LOI) from M/s Odisha Lift Irrigation Corporation Limited for the installation of deep bore wells for Solar Pumping System in the state of Odisha. The aggregate value of both LOI including GST is ~ Rs. 10.86 Crores
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.
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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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