Stock of this heavy electric equipment company has zoomed 82% in 5 days

Shares of Indo Tech Transformers (Indo Tech) rallied 10 per cent to hit upper circuit of Rs 358.65, scaling over decade high in Friday’s intra-day trade. The stock quoted at its highest level since January 2010.

The stock of heavy electric equipment company traded higher for the fifth straight day, and zoomed 82 per cent after the company reported strong March quarter earnings (Q4FY23). In comparison, the S&P BSE Sensex was up 0.68 per cent, during the period.

Indo Tech is engaged in the business of manufacturing Power, Distribution, Invertor, Convertor special application transformers, catering to various industries like Transmission, Generation, Hydro, Wind, Solar, Steel, Cement, Textiles, Utilities, DESCOMS etc.

The company has its manufacturing plant located at Kancheepuram in Tamil Nadu.

For the January-March quarter (Q4FY23), Indo Tech reported over three-fold jump in profit after tax (PAT) at Rs 19.30 crore, as against Rs 6.06 crore, in a year ago quarter (Q4FY22). Meanwhile, the company's revenue from operations grew 45.7 per cent year-on-year (YoY) at Rs 144.7 crore, compared to Rs 99.29 crore in Q4FY22.

Analysts believe that growing population along with increasing electrification, and per capita usage will further provide impetus to the rising demand for electricity. Many power sector reforms are being introduced by the Government to bring efficiency, promote decarbonisation, and ensure (24X7) reliable, and affordable power supply.

With industrial and commercial sector together accounting for nearly 50 per cent of the country’s electricity consumption, the resumption of economic activity post relaxation of pandemic restrictions has made a positive impact on the overall demand.

The gradual and calibrated resumption of economic activity will further support the growth of electricity demand, asserted analysts.

Credit ratings agency ICRA has shared a 'stable' outlook on the rating of Indo Tech as they expect the company to maintain its credit profile, backed by expected sustained revenue growth, and comfortable debt coverage indicators, and liquidity position.