This MP Birla Group stock zooms over 100% in four months

The stock hit a new high of Rs 1,918, up 8% on Tuesday in intra-day trade, after the company reported net profit of Rs 557 million in September quarter against Rs 214 million in the year-ago period.

Shares of MP Birla Group firm Vidhya Telelinks hit a new high of Rs 1,918, up 8 per cent on the BSE in intra-day trade, after the company's  net profit more-than-doubled to Rs 557 million in September quarter (Q2FY19), on the back of strong operational income. It had reported a profit of Rs 214 million in the corresponding quarter last year.

The company’s revenue from operations rose 93 per cent at Rs 5,662 million against Rs 2,938 million in the corresponding quarter of previous fiscal.

The company reported healthy numbers for the second consecutive quarter. For the first half (April-September) of the current financial year 2018-19 (FY19), Vindhya Telelinks posted a net profit of Rs 890 million against profit of Rs 401 million during the same period of FY18.

The stock has appreciated 111 per cent from its recent low of Rs 911 on July 19, 2018. In comparison, the S&P BSE Sensex has slipped 4 per cent during the same period. In the past four weeks, the stock has zoomed 57 per cent against 3 per cent rise in the benchmark index.

Vindhya Telelinks operates in two business segments i.e. cables and engineering procurement and construction (EPC).

Data-driven telecom networks will obviously require a huge deployment of optical fibre cables and this should help the industry in a big way. Due to huge demand-supply gap, the company has been able to reasonably improve the profitability, the company said in its annual report.

The government-driven projects coupled with huge roll-out plan from private sector telecom operators will help the optical fibre cable manufacturers to run their plants to the fullest capacity. As demand is far outstripping the supply, the capacity expansion, which is currently underway, is also expected to be fully utilized due to huge requirements of optical fibre cables, it added.

The company said the proliferation of 4G and voice over long-term evolution (LTE) services are paving the way for more fibre-based deployment across the country. India is also in the process of aligning itself with global roadmap of 5G deployment for which expansion and improvement of optical fibre infrastructure will be pre-requisite to meet its criteria.

The company also foresees robust demand for its copper cables product portfolio including railway signaling and quad cables with the planned increased infrastructure spending in public and private sectors and also due to focus of the government on strengthening capacity augmentation modernisation and electrification of railways/metro railways/dedicated freight corridors network across the country.

Vindhya Telelinks finally settled 4 per cent higher at Rs 1,840 on the BSE, as compared to 0.95 per cent rise in the Sensex. A combined 67,307 equity shares changed hands on the counter on the BSE and NSE today.