This smallcap stock below ₹200 hits new high, gives over 17% return in a day

Market


Schneider Electric Infrastructure (SEIL), engaged in the heavy equipment electric segment, is a small cap stock on exchanges. Amidst a strong market rally, SEIL recorded a terrific Thursday with shares hitting a new all-time high. So far in the day, SEIL shares have given more than 17% returns to investors. The stock is currently below 200 on Dalal Street and is a multi-bagger. In a span of two years, the shares have skyrocketed by nearly 109% and doubled investors’ wealth.

Stock price

SEIL shares are trading at 159.05 apiece up by 11.26% on BSE at around 2.39 pm. The shares have hit a new all-time high of 167.80 apiece — resulting in at least a 17.38% rise in the day.

The company’s market cap is around 3,804.15 crore.

On the previous day, the shares were at 142.95 apiece on BSE.

Taking into consideration the latest all-time high, year-to-date, SEIL shares have climbed nearly 54%.

In a year, the shares have jumped 46.55%. The shares were at 114.5 apiece on September 8 last year.

Meanwhile, the shares have advanced nearly 109% or over 2 times in two years. On September 8, 2020, the shares were around 80.3 apiece.

Why did Schneider Electric Infrastructure rise?

On Wednesday, SEIL announced that the company’s board of directors has approved enhancing the production capacity of Vacuum Interrupters & Vacuum Circuit Breakers by setting up a manufacturing unit in Kolkata, subject to requisite approvals, as may be required.

SEIL plans to increase capacity by an additional 180k MV Vacuum Interrupters and MV Vacuum Circuit Breakers assembly lines.

At present, the existing capacity is at 80k MV Vacuum Interrupters. The company’s existing capacity utilisation is around 90%.

SEIL expects to add the additional capacity by FY24 to FY28 with progressive investment. The first mature production is expected in 2025. Further, 138 crore will be incurred for the project over the next 3 years. The mode of financing will be internal accruals and or borrowings.

Giving rationale to the project, in a regulatory filing, SEIL stated that “meeting domestic demand as well as increase export to Schneider Electric global entities to accelerate Make in India for Global, aligned with Atmanirbhar Bharat initiative of the Government of India.”

In the first quarter of FY23 (April – June 2022), SEIL registered a strong net profit of 26.5 crore compared to a loss of 16.08 crore in Q1 of the previous fiscal. Revenue from operations stood at 371.48 crore in Q1FY23 against 288.18 crore in Q1 of FY22.

Incorporated in 2011, SEIL is engaged in the business of manufacturing, designing, building, and servicing technologically advanced products and systems for the electricity network. The company’s innovation helps customers and partners make a successful digital transformation in energy management.

SEIL manufactures a wide range of products that includes Transformers, Power Transformers, Switchgears (Primary & Secondary Switchgears), Medium Voltage Switchgear, Protection Relays, Differential Relay, Electricity distribution management systems, a software suite for self-healing smart grid, e-House & smart cities applications.

Its key end markets include Power Generation, Transmission & Distribution, Oil & Gas, Metro, MMM, and other Electro Intensive segments, etc. The company has 4 manufacturing facilities in India spread over 3 locations: Vadodara (2 units), Kolkata (1 unit), and Chennai (1 unit).

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