Following this, the stock surged 16% in today’s intraday session to its new all-time high of Rs 483.10 on BSE.
Backed by the company’s strong order book, capacity to cater to strong demand, multi-year revenue visibility, large landscape from export markets and a robust balance sheet, Axis Securities suggests a positive outlook on the stock.
Skipper has a healthy order book of Rs 5,844 crore as of June 2024 with 59% domestic T&D orders, 27% Non-T&D orders and 14% export orders, all pertaining to T&D. The company also has a strong bidding pipeline of Rs 18,000 crore of which Rs 11,500 crore pertains to international orders.
The company has the largest engineering capacity in India at 3,00,000 tonnes and it is currently operating at 90% utilisation (from 70% in FY24). To fulfil robust demand, the company is expanding its capacity by 25% i.e., 75,000 tonnes by Q1FY26. It plans to further increase its capacity by another 75,000 tonnes in FY26.
The domestic brokerage firm also stated that the additional capacity will contribute to additional revenue of Rs 800-1,000 crore in FY26.Also read: Vodafone Idea shares surge 10% after $3.6 billion deal with Nokia, Ericsson, and Samsung“The company has a strong international presence with exports to more than 60 countries and a strong foothold in Asia Pacific, Middle East, and Latin American regions. It is working on entering into developed markets such as the US, Canada and Europe which has the potential to generate lucrative contacts,” stated the report by Axis Securities.
Skipper’s Debt/Equity stood at 0.64x as of FY24. It had announced Rs 600 crore fund-raise through equity-linked instruments for the capex of Rs 800 crore over the next 4 years and Rs 200 crore through rights issues, of which Rs 50 crore has been called and raised and the authorisation of the balance call of Rs 150 crore has been received.
“Given higher working capital needs as operations expand, it will use a mix of external debt, internal accruals and equity for expansion projects, rather than using only debt for funding the expansion. It aims to maintain the debt/equity at 0.75-0.8x and not exceed 1.0x to keep the leverage under control,” added the domestic brokerage firm.
Skipper is India’s largest and the world’s only integrated T&D company present across the entire transmission chain. The company has its own structure rolling, manufacturing, tower load testing station and transmission line EPC.
Its capability to execute high-voltage power transmission projects gives it a distinct competitive edge over peers. It currently has 10%-15% market share in high-voltage transmission lines.
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