Compressors, pumps & diesel engine maker, Shakti Pumps' share price froze at its 5% upper circuit on the last trading day of September. The reason for the bullish stance comes amid Shakti Pumps' plan for bonus issuance in a ratio of 5:1. The bonus proposal will be considered in a meeting scheduled on October 7. Accordingly, Shakti Pumps stock will be in focus. Should you buy it?
Shakti Pumps Share Price:
This oil company stock ended at Rs 4,295.45 apiece on BSE, with a market cap of Rs 8,605.98 crore by the end of the September 30, 2024, trading session. This was also its upper circuit level, meaning, there were several buyers but no sellers in the second half of Monday's session.
The stock's 52-week high and low are Rs 5,089.30 apiece and Rs 843.85 apiece respectively.
Shakti Pumps is a multiagger with gains of a massive 316.77% on BSE. In a year, the stock is up by 390%. While in 5 years, the stock zoomed by 1,513.92% as of September 30. All-time gains of Shakti Pumps is about 21,377.25% on BSE. The stock was at a meagre Rs 20 on October 3, 2003.
Shakti Pumps Bonus Issue:
In its regulatory filing, Shakti Pumps said, the Meeting of the Board of Directors of the Company scheduled to be held on Monday, October 7, 2024, through video conferencing, inter alia:
- to consider the proposal for the issue of bonus shares in the ratio of 5:1 i.e., 5 (Five) new fully paid up equity shares of ₹ 10/- (Rupees Ten only) each for every 1 (One) existing fully paid equity share of ₹ 10/- (Rupees Ten only) to the equity shareholders of the Company subject to the approval of Shareholders of the Company.
Other key developments such as the proposal for increasing its authorized share capital, and the proposal for the appointment of Ramakrishna Sataluri as an Additional cum Non-Executive Non-Independent Director of the Company - will be considered for approval on October 7 as well.
This will be the second but highest bonus issue by Shakti Pumps, if approved later in the coming days. The first bonus issue by Shakti Pumps was of 1:1 ratio in April 2011.
Shakti Pumps BUY OR SELL?
As per Trendlyne data, the consensus recommendation from 1 analyst for Shakti Pumps (India) Ltd. is STRONG BUY. However, the 1-year average target price in Shakti Pumps is at Rs 1753 apiece, which signals a potential downside of nearly 59% ahead.
It needs to be noted that if Shakti Pumps carried its bonus issue ahead, then the stock price will be adjusted to the ratio of 5:1, eventually becoming cheaper for both new and existing customers.
In Q1FY25, the company reported revenue of Rs 567.6 crore, rising from Rs 113.1 crore in Q1FY24. While EBITDA stood at Rs 135.9 crore in Q1FY25 as against Rs. 7.9 crore in Q1FY24. EBITDA Margin at 23.9% in Q1FY25 as against 7.0% in Q1YF24, largely driven by economies of scale and higher execution rate. Further, PAT grew to Rs. 92.6 Crores in Q1FY25 from Rs. 1.0 Crores in Q1FY24. PAT Margin expanded to 16.3% in Q1FY25 from 0.9% in Q1FY24.
About Shakti Pumps:
SPIL founded in 1982 as a partnership firm and later converted to a public limited company in 1995, manufactures solar pumps, energy-efficient stainless-steel submersible pumps, pressure booster pumps, pump-motors, and other products. SPIL is the only company that manufactures a wide range of products for solar pump installation in-house, including Variable Frequency Drives, Structures, Motors, Invertors, and so on. Pithampur, Madhya Pradesh, is home to two manufacturing facilities with a combined capacity of 500,000 pumps and motors per year (India). Shakti Pumps is at the forefront of sustainable innovation and reliability in solar pumping solutions, while also being environmentally responsible. The company has been at the forefront of transforming the agriculture sector through solar pump technology.
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