BGR Energy zooms over 850% within year; what's driving smallcap stock?

BGR Energy Systems share price today

 

Shares of BGR Energy Systems hit an over 13-year high at ₹336, and were locked at the 5 per cent upper circuit on the BSE in Friday’s intra-day trade. The stock of the smallcap company was quoting higher for the ninth straight trading day, surging 50 per cent during the period.

 

Within a one year, the market price of the civil construction company has zoomed 871 per cent from a level of ₹34.6 on October 28, 2024. The stock now trades at its highest level since May 2012. It had hit a record high of ₹988 on January 4, 2008.

 

 

Currently, BGR Energy trades under 'T' or Trade-for-Trade (T) group on the BSE. The T group is a surveillance measure that requires securities to be settled on a trade-to-trade basis.

Why is BGR Energy stock price zooming?

 

BGR Energy is engaged in Engineering Procurement Construction (EPC), Balance of Plant (BOP) and LSTK contracting, provides construction services and technology oriented projects to the infrastructure and core sectors and manufacture of high tech equipment and systems for power, oil, gas and other process industries.

 

During the year 2024-25 the company’s revenue was drastically reduced due to cash crunch for continuing the existing projects and the company decided not to take any new order in BOP till the banking problem persists.  ALSO READ | Metal stocks shine as JSW, Tata Steel rally; analysts lift H2FY26 view 

BGR Energy in Q1 results notes said that the promoters infused unsecured loan of ₹433.18 crore for business operation upto June 30, 2025. Though there has been encashment of Bank Guarantees, the company is continuing to execute the contracts and are hopeful of amicable solutions. The company is in discussions with the bankers for a restructuring package.

 

The company after a review of the current macro level developments and competition landscape planned foray into the Infrastructure, Highways Construction, Transmission.

 

Meanwhile, the demand for power is increasing substantially. Despite the increase in renewable energy capacities, and despite the Renewable Purchase Obligation (RPO) set at 21 per cent, thermal power has contributed more than 80 per cent of the overall power consumption.

 

As per Central Electricity Authority (CEA), the annual Electrical Energy requirement will be 4 trillion units by FY 2035 while the current generation is only covering 35 per cent of the requirement. This demand cannot be met alone with the renewable sector. With state-run genco NTPC announcing that it is planning to be a 130 GW company in 2032, there is huge growth forecasted in thermal power sector which augurs well for the company’s growth, BGR Energy said in its FY25 annual report.

 

Further, there is also huge scope in renovation & modernization of existing power plants, including replacement of old units with new power plants. In order to comply with the new emission standards, installation of Flue Gas Desulfurization units in existing power plants presents a new market segment to capitalize for the company.  ALSO READ | ₹576-cr deal sends Afcons Infrastructure shares 3% higher today; details 

The Pradhan Mantri Gatishakti Bharat Master Plan for integrated infrastructure growth will offer robust growth potential in various sectors in the years to come. The flagship Jal Jeevan mission of GoI will see huge development under the rural and urban water supply infrastructure development in next couple of years.  With the company’s Civil Projects Division and Environmental Engineering Division, the company is in prime position to tap into this huge market.

 

Meanwhile, the company is also exploring various business opportunities in Extra High Voltage (EHV) underground cabling projects, Traction Substation projects from Railways, Electrification packages for upcoming private projects, etc.