This capital goods engineering company has zoomed 107% thus far in CY2024

Shares of Salzer Electronics hit a record high of Rs 834.45, as they rallied 7 per cent on the BSE in Thursday’s intra-day trade. This came on the back of a healthy business outlook. The stock of the capital goods engineering company is quoting higher for the sixth straight trading day, surging 31 per cent during this period.

Thus far in the calendar year 2024 (CY2024), the stock price of Salzer has zoomed 107 per cent from level of Rs 404.05. In comparison, the S&P BSE Sensex is up less than 1per cent; while, the S&P BSE Smallcap index slipped 2 per cent.

In the past one month, the stock soared 59 per cent after the company announced the building of a smart meter manufacturing facility in Coimbatore, India to meet high demand.

The company has already received BIS certification for 'Single Phase Smart Energy' meter. The first batch of smart meters is expected to roll out in Q1 FY25, from the new facility, Salzer said.

This new smart meter manufacturing plant will have an annual production capacity of 4 million smart energy meters, which will be increased to 10 million in phase two.

India is seeing exceptional demand for 'Smart Energy Metres', which is projected at 250 million units initially, with a potential increase to 350 million during the next three years under the Revamped Distribution Sector Scheme (RDSS) launched by the Government of India.

As per Astute Analytica, India smart meter market is likely to reach $3.27 billion by 2031 growing at a CAGR of 34.57 per cent in the period 2023 to 2031. Salzer is well-positioned to help meet this need by modernising and improving the country's energy infrastructure, the company said.

Meanwhile, as economies rebound from various geopolitical tensions, a surge in investments is expected in various construction infrastructure projects across the world, and particularly in India. This will in turn escalate the demand for all electrical products, including wires and cables.

Also, the global shift towards clean energy is fostering investments in renewable energy projects. The widespread adoption of automation and smart technologies across industries is fueling demand for specialised electrical components, wires and cables that support high speed data transmission and connectivity, the management said.

The management is optimistic about the medium to long term prospects of the company despite near term adjust. “We see significant potential for growth and value creation driven by our strategic incentive initiatives like our foray into EV charging along with diversification of products into various new sectors, one, including the HVAC sector that we have done recently, and the renewable sector,” the management had said in Q3FY24 earnings call.

Salzer is a leading player offering total and customised electrical solutions in switchgears, wires and cables, and energy management business. It is the largest manufacturer of CAM operated rotary switches and wire ducts in India. In India, Salzer markets its products through its own distributors and more than 350 local distributors of L&T.