This stock jumps 20% on bagging order from UP govt

Shares of GMR Power and Urban Infra hit their 20% upper circuit limit on Friday after its subsidiary, GMR Smart Electricity Distribution Private Limited (GSEDPL), secured an order from the Uttar Pradesh government. GSEDPL has won a contract to install, integrate and maintain 75.69 lakh smart meters in the state over a period of 10 years. The company, however, did not disclose the value of the order.

Boosted by the development, GMR Power shares opened at ₹24.14 on the BSE, up 20% against the previous closing level of ₹20.12, on the back of strong volume trade.

At the time of reporting, the smallcap stock was trading 12.6% higher at ₹22.65 on the BSE, with 41.4 lakh shares changing hands over the counter compared to two-week average volume of 1.83 lakh stocks. The market capitalisation stood at ₹1,367 crore.

The stock touched a 52-week high of ₹38.65 on August 30, 2022, and 52-week low of ₹14.32 on March 28, 2023. In the last one year, the stock has risen 11.5%, whereas it gained 5% in six months. In the calendar year 2023, the counter has fallen 3%, while it jumped 31% in a month and 17.5% in a week.

“GSEDPL, a stepdown subsidiary of GMR Power, has received letter of intent from Purvanchal Vidyut Vitran Nigam and Dakshinanchal Vidyut Vitran Nigam, to implement smart metering project in the Purvanchal (Varanasi, Azamgarh zone and Prayagraj, Mirzapur zone) and Dakshinanchal (Agra and Aligarh zone) area of Uttar Pradesh,” GMR Power says in a BSE filing.

As per the release, the contract has been issued in conclusion to the e-tender floated by UP Discoms for different areas of Uttar Pradesh. “GSEDPL participated in the e-tender and emerged as a winner. The project will be spanned over a period of 10 years,” it adds.

This advanced metering infrastructure (AMI) project will include supply, installation, integration, commissioning and operation & maintenance of smart meters on DBFOOT basis backed by technology and software solutions for end-to-end automated system management.

The project will be executed under revamped distribution sector scheme (RDSS) and is expected to reduce the aggregate technical and commercial (AT&C) losses in the designated area and improve operational and collection efficiency of UP Discoms, the release said.

For the fourth quarter ended March 2023, GMR Power reported a consolidated net loss of ₹449.7 crore compared with loss of ₹325.4 crore in Q4FY22. In the December quarter of FY23, the company had posted a profit of ₹393.4 crore. The consolidated net revenue dropped to ₹1,169.8 crore from ₹1,378.3 crore in Q4FY22 and ₹1,399.8 crore in Q3FY23.

On the operational front, EBITDA stood at ₹81.9 crore versus ₹57.8 crore in Q4FY22 and ₹138.1 crore in Q3FY23. The margin was at 7%, 4%, and 10% in Q4FY23, Q4FY22, and Q3FY23, respectively. 

DISCLAIMER: The views and opinions expressed by investment experts on fortuneindia.com are either their own or of their organisations, but not necessarily that of fortuneindia.com and its editorial team. Readers are advised to consult certified experts before taking investment decisions.