 "Quadrant Future Tek soars 44% in 2 days; zooms 85% against issue price")
Shares of Quadrant Future Tek (Quadrant) rallied nearly 20 per cent to Rs 537.80 on the BSE in Wednesday’s intra-day trade, extending its Tuesday’s 20 per cent surge amid heavy volumes. The stock of electrical cables company has soared 44 per cent from its listing price, after making a strong market debut on Tuesday. It has zoomed 85 per cent against its issue price of Rs 290 on the BSE.
At 10:06 AM; Quadrant was quoting 18 per cent higher at Rs 531, as compared to 0.30 per cent rise in the BSE Sensex. A combined 12.49 million equity shares representing 31 per cent of total equity of the company changed hands on the NSE and BSE on Wednesday.
Quadrant is a research-focused company specialising in Train Control and Signalling Systems under the KAVACH project, enhancing safety and reliability for Indian Railways. It also manufactures specialty cables for railways, defence, and renewable energy, using advanced Electron Beam technology for superior performance. The company has received significant contracts for its KAVACH system and partners with RailTel to expand its deployment in India and abroad.
The company sits on a strong order book, including a notable Rs 979 crore contract for KAVACH implementation, which highlights its robust revenue visibility. Strategic partnerships, such as with RailTel for KAVACH deployment, bolster its position in domestic and international markets. With favourable industry tailwinds and increasing demand for its offerings, Quadrant is well-positioned for sustained growth, analysts at Nirmal Bang Securities said in IPO note.
Quadrant primarily operates in two business divisions, speciality cables and train control and signalling division. Under the speciality cables divisions, the company faces competition with other players providing speciality cables to railways namely Apar Industries, Polycab and Radiant Corporation Pvt. Ltd. As on the date of Red Herring Prospectus (RHP), entities namely, Medha Servo Drives Pvt. Ltd, HBL Power Systems and Kernex Microsystems (India) has been approved by The Research Designs & Standards Organisation (RDSO) for supply of KAVACH equipment based on initial system design approved.
Quadrant, specialising in the production of specialty cables and advanced train control and signaling systems, such as the KAVACH project for Indian Railways, leverages cutting-edge technologies like Electron Beam Cross Linked polymers. These innovations enhance the durability and performance of its products across demanding sectors including railways, defense and electric vehicles. With significant infrastructure developments and government initiatives like the Rs 557 crore funding for the KAVACH project, Quadrant is well positioned within its industry, said analyst at KRChoksey Shares and Securities in a note.
"With a PE ratio of 79x and an EV/EBITDA of 34x, Quadrant Future Tek Limited's valuation is notably higher than some of its peers, justified by its strong market position, robust growth prospects and solid financial performance, evidenced by a robust ROE of 33 per cent. The premium valuation is further underpinned by its large addressable market and significant project wins, specifically in KAVACH, which enhances its growth potential and ensures sustainable growth prospects," the brokerage firm said.