Shares of engineering and construction company SPML Infra hit 5% upper circuit for the second consecutive session on Tuesday, in an otherwise weak broader market. The stock price rose 5% to ₹69.45 on the BSE after the infra company announced that it has bagged several arbitration awards worth ₹712 crore from different clients in India.
The little-known water management and infrastructure development company has delivered astonishing returns to its investors in the past one year, driven by new orders and optimism on the government’s big push to the infrastructure sector. The stock has risen 746% in one year, with its shares jumping to ₹69.45 today, from its 52-week low of ₹8.2 touched on April 19, 2021. It hit a 52-week high of ₹73.2 on April 7, 2022.
This means, ₹1 lakh invested in this microcap stock at ₹8.2 apiece last year would have turned into ₹8.46 lakh at present.
The penny stock has risen 144% since the beginning of the calendar year 2022 and 25% in one month, while it remained in consolidation mode during the past week. In the last six months, the share has given multibagger returns to its shareholders as it rose 575% in this period.
Currently, the market capital of SPML Infra shares is around ₹273.8 crore, while its book value per share is minus 9.76, which indicates that its liabilities exceed its assets. The stock traded higher than 5-day, 20-day, 50-day, 100-day, and 200-day moving averages.
SPML Infra in an exchange filing on Tuesday said that it has secured several arbitration awards worth a cumulated amount of around ₹712 crore (including interest up to September 30, 2019) for the projects from different clients in India. Besides, the company is in the final stages of filing several claims with the value of around ₹3,000 crore. This is over and above the arbitral awards of ₹712 crore that have been awarded and are expected to be realised in due course of time.
“The PSU clients’, against whom the company has received the awards, have preferred to appeal the same, which are presently at various levels of hearing at the courts. SPML Infra Ltd. is very confident of receiving the full amount of arbitral awards along with the interest up to the date of receipt in due course,” SPML Infra said in a release today.
Commenting on the development, Subhash Sethi, chairman, SPML Infra said, “The arbitration awards are encouraging and we are really pleased that our project claims have been upheld in the arbitration process. The arbitrators have issued the orders on merits. Sometimes, the delays in land acquisitions, drawing approvals, and unforeseen changes in contractual conditions with other pressing issues makes it difficult for the construction companies to execute the projects.”
Established in 1981, SPML Infra has managed and implemented over 650 projects across India on an EPC (Engineering, Procurement and Construction), PPP (Public Private Partnership), and BOOT (Build-Own-Operate-Transfer) basis. It has over three decades of multidisciplinary experience in executing world-class infrastructure for water treatment and transmission, waste water handling, treatment and recycling, solid waste management, power transmission and distribution, and civil infrastructure development.
For the 9-month period ended December 31, 2021, the company posted net profit of ₹6.31 crore as against loss of ₹73 crore during the same period last year. The total income rose to ₹727.70 crore as compared to ₹501.60 crore during the 9-month period ended December 31, 2020. During the October-December quarter of FY22, the company reported net profit of ₹1.08 crore and total revenue of ₹278.40 crore.