Stock of this industrial products company has zoomed 79% in past one month

Thus far in the calendar year 2023, share price of Hind Rectifiers has skyrocketed 161 per cent, as against 5.3 per cent rise in the S&P BSE Sensex.

Shares of Hind Rectifiers were locked in the 20 per cent upper circuit at Rs 597.15 on the BSE on Friday at 12:23 PM; with only buyers seen on the counter ahead of September quarter (Q2FY24) results on Saturday. A combined around 310,000 equity shares representing 2 per cent of total equity of the company had changed hands on the NSE and BSE. There were combined pending buy orders for 30,000 shares, the exchanges data shows.

In past one month, the stock price of industrial products company has zoomed 79 per cent, as compared to 1.7 per cent decline in the S&P BSE Sensex. Thus far in the calendar year 2023, it has skyrocketed 161 per cent, as against 5.3 per cent rise in the benchmark index.

Hind Rectifiers manufactures power electronic equipment such as traction transformers for locomotives and electrical multiple units, converters, rectifiers, power semiconductors and railway transportation equipment such as switch board cabinets, regulated battery chargers and inverters.

In the first quarter ended June 2023 (Q1FY24), Hind Rectifiers had reported a net profit of Rs 1.90 crore, compared to net loss of Rs 2.27 crore in year ago quarter and loss of Rs 2.46 crore in March 2023 quarter (Q4FY23).

The company’s major business continues with Indian Railways with strong legacy and brand image. Technology-based products for Locomotives & Coaches continue as major strength of the company’s business operations.

Although the primary customer continues to be Indian Railways, however, the company is putting increased focus on developing new products for private rolling stock manufacturers, and Industrial sector by upgrading and expanding existing product lines, besides growth of new business for the European market through marketing operations from Sweden, Hind Rectifiers said in its FY23 annual report.

The company further said, industrial business is likely to be increased considering the growth anticipated in various international and domestic projects in power sector & also infrastructure development planned by the Government of India.

The company has been certified for Aerospace standards, and registered with Defence organizations, and which is likely to bring a additional revenue stream in coming years. There is a good mix of SMEs, Large Companies and multinationals players in the market for the company’s various product lines, it added.

The government has aggressively increased Electric Locomotive production, electrification of new routes, and modernization of Railway facilities which has increased market demand. However railways is introducing more Distributed Power Rolling Stock (DPRS) like Vande Bharat Trains, and also private manufacturers of rolling stock for which the company will have to adapt and develop new design of equipment as well.

Meanwhile, Hind Rectifiers have low equity base, with 17.12 million outstanding shares as on September 30, 2023. The promoters held 44.08 per cent, while the remaining 55.92 per cent stake was held by the public shareholders, data shows.