This infra stock has zoomed 80% in 7 days; Quant MF acquired 1.75% stake

OM Infra hit a record high of Rs 174 on rallying 10% on the NSE in Thursday's intra-day trade. The stock has appreciated by 29 % in two days after Quant MF purchased nearly 2% stake in via open market

Shares of OM Infra hit a record high of Rs 174, as they rallied 10 per cent on the National Stock Exchange (NSE) in Thursday’s intra-day trade backed by heavy volumes. In the past seven trading sessions, the stock of this infrastructure company has bounced back 80 per cent from its low of Rs 97.05 touched on June 4.

In the past two trading days, the stock price of OM Infra has appreciated by 29 per cent after Quant Mutual Fund (MF) purchased nearly 2 per cent stake in the company via open market deals.

On June 11, 2024, Quant MF acquired 1.69 million equity shares of OM Infra at price of Rs 130 per share on the NSE, the exchange data shows.

Om Kothari Foundation, one of the promoters of OM Infra, sold its entire 583,227 equity shares or 0.61 per cent holding in the company at Rs 130.02 via block deals, the NSE data shows. The names of the other sellers were not ascertained immediately.

At 11:19 am; OM Infra was trading 5 per cent higher at Rs 167, as compared to 0.27 per cent rise in the Nifty 50. A combined 3.31 million equity shares changed hands on the NSE and BSE.

Om Infra is engaged in diversified activities including turnkey solution for hydro mechanical equipment for hydro power & irrigation projects, Jal-Jeevan Mission projects, real estate development and civil construction. OM Infra has its main fabrication unit for hydro mechanical division in Kota, Rajasthan. The company’s total fabrication capacity is 15,000 Metric Tonnes Per Annum (MTPA). The company has also forayed into construction of Dams/ Reservoirs on EPC basis, along with fabrication and installation of hydro mechanical equipment.

For the financial year 2023-24 (FY24), OM Infra had posted 257 per cent year-on-year (YoY) growth in consolidated profit after tax at Rs 47 crore, on back of 39 per cent YoY jump in consolidated revenue of Rs 1,114 crore. The company’s earnings before interest, taxes, depreciation & amortization (Ebitda) margin improved 330 bps to 8.0 per cent in FY24 from 4.7 per cent in FY23.

The company has a healthy order book of Rs 2,235 crore, forming ~2.8x of FY23 revenue. During FY24, overall debt has been reduced by ~Rs 50 crore to Rs 74 crore from Rs 125 crore in FY23; Debt-to-Equity stands at 0.1x, OM Infra said.

India has issued tenders for the development of 250GW renewable energy by March 2028, with the main objective of lowering emissions. India is also seeking to boost non-fossil fuel capacity - solar, wind, hydro and bio power generation - to 500 GW by 2030, also vowed to attain net zero carbon emissions by 2070.

OM Infra is one of the leading players in the execution of hydro mechanical projects and has been in the industry for over four decades. OM Infra has successfully executed more than 60 hydro mechanical and irrigation projects across India and abroad. The vast experience of the company in such projects brings them a significant advantage while bidding orders.

The government’s Jal Jeevan Mission (JJM) is growth opportunity for the company. The focus of the mission is to enable every household in villages to have Functional Household Tap Connection (FHTC) (Har Ghar Jal) by 2024.

OM Infra had received orders under the JJM for Rajasthan and Uttar Pradesh, totaling ~Rs 2,000 crore, where work has progressed well and is bidding for more such projects.

The New Hydro Policy (Mar’19) shall prove to be a milestone in growth of Hydro Sector. Other key positives like re-classify large hydroelectric projects as renewable energy, tariff rationalization measures, notification of HPO as separate entity, budgetary support for enabling infrastructure, likely to boost the sector, the company said.

The overall implementation of Interlinking of Rivers would give benefits of 35 million hectares of irrigation raising the ultimate irrigation potential from 140 million hectare to 175 million hectare, it added.