Skipper surges 8% on fresh order win worth Rs 588 crore

Shares of Skipper surged 8 per cent to Rs 245.05 on the BSE in Monday's intraday trade after the company said it has won fresh orders worth Rs 588 crore from domestic & international market. The stock of the power transmission & distribution (T&D) and the polymer segment company had hit a 52-week high of Rs 254.90 on September 1, 2023.

In an exchange filing, Skipper said the company received orders in the domestic T&D business worth Rs 468 crore from Power Grid Corporation of India (PGCIL) and other customers. Besides, it bagged orders in the international T&D business worth Rs 120 crore.

The consistent order inflows in the T&D business have led to a total order inflow of Rs 1,803 crore so var this year, registering an impressive 200 per cent growth over last year till date, the management said. They expect the momentum to continue in T&D ordering in both, Domestic and International, markets with some more wins in the new future.

Skipper operates in three distinct business segments: engineering, polymer, and infrastructure. Its engineering division, which has a manufacturing capacity of 3,00,000 MTPA, focuses on producing transmission tower, telecom towers, poles, distribution poles, angles, fasteners, and railway structures, accounting for approximately 77 per cent of the total revenue.

The polymer segment, with a manufacturing capacity of 51,000 MTPA, is involved in the production of UPVC pipes, CPVC pipes, SWR pipes used for plumbing and irrigation purposes, contributing around 20 per cent of the total revenue.

The remaining 3 per cent of revenue comes from the EPC segment, where the company undertakes power transmission projects. Skipper operates four manufacturing units, with three located in West Bengal and one in Assam.

In the past six months, the stock price of Skipper has zoomed 131 per cent as compared to 10.5 per cent rise in the S&P BSE Sensex.

Rating agency Acuite Ratings & Research Limited (Acuite) believes that the diversified business profile and experienced management will continue to benefit the operations of the company over the medium term.

"Skipper's revenues will continue to show improvement on account of timely execution of orders and healthy order book position. Going forward, the financial risk profile will likely remain healthy over the medium term, supported by healthy networth and low gearing levels of the company," the agency said.

Acuite further believes the outlook of Skipper will remain 'Stable' over the medium term backed by its long track record of operations, strong business profile, healthy order book, and comfortable financial risk profile.

"The outlook may be revised to 'Positive' if the company is able to improve its coverage and leverage parameters significantly with sustained revenue growth. Conversely, the outlook may be revised to 'Negative' in case of deterioration in its profitability margin or liquidity profile due to stretched working capital requirement," it said in its rating rationale.