This SME stock tanked 78% from record high after zooming 401% in 5 months

Shares of Waaree Technologies are locked in lower circuit for the fifth straight trading day, declining 5 per cent to hit Rs 482.15, its fresh 52-week low on the BSE in Tuesday’s intra-day trade. In two weeks, Waaree Technologies share price has slipped 36 per cent. It has tanked 78 per cent from its record high level of Rs 2,209.40 that it touched on April 19, 2024.

 

Prior to that, in five months, the market price of the power generation company had skyrocketed 401 per cent from Rs 441 on November 17, 2023.

 

Currently, Waaree Technologies is trading under 'MT' group only on the BSE. For the BSE SME scrips that are listed under the 'M' group, trading, clearing and settlement is done on a net basis, while for those listed under the 'MT' group, the trading, clearing and settlement is done on a gross basis.

 

As on September 30, 2024, the small and medium enterprises (SME) company had 10.77 million outstanding equity shares. Of these, the promoters held 58.80 per cent holding in the company. Of the remaining 41.20 per cent holding, resident individuals held 40.12 per cent stake in the company, shareholding pattern data from the exchanges showed.

 

For the first half (April to September) of the financial year 2024-25 (H1FY25), Waaree Technologies had reported a net loss of Rs 2.62 crore, compared to a loss of Rs 1.99 crore in H1FY24. The company’s revenue from operations more than halved to Rs 5.6 crore, from Rs 13.50 crore during the same period last fiscal.

 

Waaree Technologies is currently engaged in the business of battery manufacturing; accordingly the revenue for the year comprises revenue from trading and sale of cells required for batteries, apart from the batteries itself.

 

In its FY24 annual report, Waaree Technologies, said it expects good business from the trading and sales of batteries and its product components. "The electric vehicle (EV) push by the government and domestic/C&I/Grid Scale Storage of energy will provide good business opportunities to the company. Considering the acquisition of battery business and opportunities in the market, management considers a favourable outlook for the company to achieve considerable business in future," it stated.

 

However, the company added that it has to operate in a highly competitive and price sensitive market, and acquiring a grip over such a market to hold its foot firmly is challenging. Adverse changes in the government's policies may affect the business operations of the company, it noted.

 

Obsolescence has become the order of the day in this industry and thus to be at par with its competitors, the company has to ensure that it constantly updates and upgrades its technology/bill of materials and product offerings, the company's management said. It added that at present, it is exposed to the normal industry risk factor of change in technology, unfavourable government policies, volatility in interest rate, economic cycle and credit risk.