This smallcap stock surged 10% for 2nd straight day; zoomed 186% in 1 year

Since September 19, 2024, in past four weeks, the stock price of Hind Rectifiers has soared 34 per cent after bagging a multiple orders over Rs 298 crore from Indian Railways.

Hind Rectifiers share price: Shares of Hind Rectifiers hit a new high of Rs 1,068.85, as the scrip rallied 10 per cent on the BSE in Thursday’s intra-day trade, extending its Wednesday’s 10 per cent surge in otherwise a weak market. 

At 11:26 AM, stock of the smallcap company was trading 6 per cent higher at Rs 1,032.95, as compared to 0.5 per cent decline in the BSE Sensex. In the past one year, the market price of Hind Rectifiers has appreciated by 186 per cent, as against 22 per cent rise in the benchmark index.

Since September 19, 2024, in the past four weeks, the stock soared 34 per cent after bagging multiple orders over Rs 298 crore from Indian Railways. 

Hind Rectifiers, on September 21, informed that the company has secured supply orders worth more than Rs 200 crore from Indian Railways. Further, on September 28, it secured orders amounting to Rs 98 crore from Indian Railways. The supply orders are as per terms and conditions of railways, and need to be executed in the financial year 2025-26.

Hind Rectifiers is principally engaged in developing, designing, manufacturing and marketing power semiconductor, power electronic equipment and railway transportation equipment. The company 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.

Analysts expect the increase in revenues, driven by a healthy order book, which provides revenue visibility over the medium term. The operating margins are expected to remain steady in the range of 8-9 per cent over the medium term.

The government has aggressively increased Electric Locomotive production, electrification of new routes, and modernisation of railway facilities which has increased market demand. There is growth potential to increase our market share of existing products, and introduce new products in a dynamically changing market, according to Hind Rectifiers.

Furthermore, railways have introduced 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.

Hind Rectifiers in its FY24 annual report said that the company has a strong brand and leadership position in the market for locomotives and railway coaches equipment along with the industrial rectification and pollution control equipment with updated technology.

While opportunities are emerging with new developments in the Railway segment backed by enormous resources of in house R&D coupled with new manufacturing facilities, the Company can take lead considering the brand name and leadership position in the market, however, increased number of competitors and falling selling prices is a threat for existing product lines, it added.