This well-diversified power company has returned 600% in just two years

This well-diversified power company has returned 600% in just two years | 5Paisa|

Indian Market
by 5paisa Research Team Last Updated: 2022-10-03T17:30:33+05:30

Company's diversification strategy resulted in its stock becoming a multibagger

Shares of HBL Power are presently trading at Rs 92.7. In less than two years, the stock had returned 600%. The stock has a 52-week high and low are Rs 105 and Rs 47, respectively. With a market capitalization of Rs 2570 crore, the stock is currently trading at a PE of 26.6x. The price of the stock increased from Rs 11 in Apr 3, 2020 to Rs 92 in October 3, 2022.

HBL Power Systems Ltd manufactures many types of batteries and other items. It also provides service for the aforementioned products. It has made a name for itself as a prominent manufacturer of batteries, electronics, and engineering items.

Its battery vertical accounts for 64% of revenue. The firm is one of India's largest manufacturers of industrial batteries. It manufactures batteries for telecommunications, UPS, railways, solar, oil and gas, and power industries. It manufactures a variety of batteries, including lead-acid, tubular gel, pure lead thin plate (PLT), and nickel-cadmium batteries.

It also has a foothold in the railway electronics vertical, which accounts for 10% of its revenue. TCAS and TMS are two of the company's flagship solutions for addressing the demand requirements of railway signalling in India. They are concerned with railway safety and track utilisation efficiency for the Indian Railways.

Its defence vertical has shown sustained growth. It currently accounts for 24% of total revenue. The company offers a wide range of items to the Indian defence industry. It provides specialised batteries used in high-stress applications such as fighter aircraft, unmanned aerial vehicles, submarine propulsion systems, torpedoes, battle tanks, missiles, and artillery fuses.

The company has a global presence in over 80 countries. Through its subsidiaries, it has a presence in America, Europe, and the Middle East. The company now owns and runs six manufacturing factories in Telangana and Andhra Pradesh.

The company's TTM sales are Rs 1325 crore. The company's revenue in FY22 was Rs 1236 crore and the operating margin improved dramatically from 7.4% to 11.2% in FY22. The company is making capital investments. In March 2022 its capital work in progress doubled from Rs 43 crore to Rs 81 crore. The average ROCE and ROE of the company are 14.6% and 11.16%.

 

 


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