Investing Strategy, Share Of Imp powers news ,German company,Trade Nivesh, trading news
january months ago
Shares of IMP Powers were locked in 5% upper circuit after the company entered into a 20-year license agreement with Smart Hydro Power GmbH, a German company.
Through the license agreement, the company has secured exclusive rights to manufacture turbines and exhibit Smart Free Stream and Smart Monofloat turbines under its brand name in India, Laos, Nepal, Bhutan, Sri Lanka and eastern Africa.
The stock rose for the fourth consecutive session and has gained over 8% in this period.
So far today, over 27,669 shares of the company have traded on the NSE, higher than their six-month daily average trade of 16,383 shares.
The stock is currently trading at Rs125.25, up by Rs5.95 or 4.99% from its previous closing of Rs119.3 on the BSE. The scrip opened at Rs125.25 and has touched a high and low of Rs125.25 and Rs125.25 respectively.
Rise in India’s T&D spend and debt reduction by IMP through the sale of non-core assets are key triggers for the stock, which is trading at 8x FY17 P/E and 4.5x EV/EBIDTA.
Mumbai-based IMP Powers is a manufacturer of EHV, power, distribution, special purpose, furnace, thyristor duty transformers and reactors for up to 315 MVA in the 400 kV class. India’s total transformer manufacturing capacity stands at 500GVA, while the power requirement is ~550 GVA each year. The new government has ambitious plans to set up 700GW power generation plants by 2030; 175GW renewable energy projects by 2022; 100 smart cities; 16 UMPPs of 4000MW each; and 14.6GW of nuclear energy capacity by 2020. The national SMART grid mission will boost transformer requirement in the future.
In the past two years, the company’s revenue CAGR was 25% and operating profit CAGR was 22%. PAT remained flat at 2.6cr due to higher interest cost. We expect the selling of non-core assets to lead to debt reduction and refinancing of current debt to result in significant reduction in interest burden.
IMP Energy, a subsidiary of the company that operates in the renewable energy space, will benefit from the government’s increasing focus on renewable energy. In Q3 FY16, IMP’s revenue improved 12% yoy to Rs117cr, whereas operating profit declined 2% yoy to Rs8cr. The company registered a profit of Rs1.8cr in Q3 FY16 compared with the profit of Rs2.7cr in Q3 FY15.