Why has this Mukul Agarwal portfolio stock soared 25% in 2 days? Details

The stock of multinational pumps and systems company WPIL is quoting higher for the fourth straight day, surging 32 per cent during the same period

WPIL shares rallied 9 per cent to Rs 527 on the BSE in Thursday’s intra-day trade, extending its Wednesday’s surge in an otherwise subdued market on healthy earnings.  In two days, the stock of the pumps and pumping systems company has zoomed 25 per cent after it posted a 63.6 per cent year-on-year (YoY) jump in consolidated net profit at Rs 70.22 crore for the second quarter ended September 2024 (Q2FY25). The company had reported a net profit of Rs 40.81 crore in the year ago quarter.

 

Revenue from operations during the quarter under review grew 54 per cent YoY to Rs 490.89 crore from Rs 318.74 crore in Q2FY24. Earnings before interest, taxes, depreciation, and amortisation (Ebitda) rose 56.6 per cent to Rs 104.34 crore, while margins improved to 21.26 per cent from 20.91 per cent. The company has a total order book of around Rs 3,665 crore.

 

The company's stock is quoting higher for the fourth straight day, surging 32 per cent during the period. It had hit a 52-week high of Rs 543 on July 29, 2024. At 09:23 AM, WPIL share price 8 per cent higher at Rs 522, as compared to 0.16 per cent decline in the BSE Sensex.

 

Investor Mukul Mahavir Agarwal held 1.3 million equity shares, or a 1.33 per cent stake, in WPIL at the end of September 2024 quarter, shareholding pattern data on the bourses showed.

 

WPIL is engaged in the business of providing fluid handling solutions – from supply of pumps to turnkey project execution. It supplies a comprehensive range of pumps to the Industrial, municipal, irrigation and power sector. The company also has a strong project division which undertakes water management contracts in the above sectors.

 

WPIL, in its investor presentation, said that the outlook for its product division is improving based on product portfolio expansion and strong market presence. It also sees excellent prospects for exports from its international operations.

 

The company's project execution momentum has gained traction, with growth expected to continue in the second half of the financial year after the monsoon season. Moreover, its project commissioning has remained on schedule over the past two quarters.  The company is actively pursuing new contract opportunities, anticipating an increase in the pace of new tenders in the second half of the financial year, the company said.

 

The company's international business operations remain stable and the outlook remains strong across all businesses. Its unit Gruppo Aturia has been benefitting from a strong after market performance and awaits revival of a large number of delayed contracts in the MENA region for growth. With large investments announced in South Africa for both water and power, growth prospects for the company look exciting.  Apart from that, its other units Sterling Pumps and United Pumps Australia, have record order books and are expected to post strong revenue growth in FY25.  Meanwhile, WPIL Thailand continues its strong performance and has started benefitting from large water infrastructure investments in Thailand.

 

Moreover, the company's domestic business outlook remains strong with strong orderbooks and improving execution across both divisions.  Furthermore, the market outlook is improving with an emphasis on public infrastructure projects especially in the urban municipal sector and supported by investments in both downstream and upstream oil and gas projects, WPIL had said in its FY24 annual report.