Multibagger infra stock hit upper circuit after company executes term sheet with Shimato Enterprises Pvt Ltd for 21 MW of solar power project

The stock gave multibagger returns of 820 per cent in 1 year and a whopping 2,885 per cent in 5 years.

On Friday, shares of Constronics Infra Limited hit a 5 per cent upper circuit to Rs 131.65 per share from its previous closing of Rs 125.40 per share. The stock’s 52-week high is Rs 157.70 per share and gave multibagger returns of 820 per cent from its 52-week low of Rs 14.30 per share.

The Government of India has placed significant emphasis on renewable energy sources, particularly solar power, as part of its commitment to reduce carbon emissions and achieve net-zero by 2070. Recognizing this opportunity, Constronics Infra Limited intends to venture into the development of solar power projects. To initiate this endeavor, the company has entered into a term sheet with Shimato Enterprises Private Limited, an Indian entity, for the development, operation, and maintenance of a 21 MW solar power project in Virudhunagar, Tamil Nadu. Shimato will act as the turnkey contractor, responsible for all aspects of the project, including design, supply, installation, and ongoing operations and maintenance.

The term sheet outlines the key terms and conditions governing the development and execution of the 21 MW solar power project. Shimato will be responsible for the entire project lifecycle, from acquisition of land to final commissioning and subsequent operation and maintenance. The specific timelines for project completion will be detailed in the definitive agreements to be executed between the two parties. It is important to note that there is no related-party relationship between Constronics and Shimato, ensuring transparency and independence in the transaction.

The solar power project, located in Virudhunagar, Tamil Nadu, is expected to have a capacity of up to 21 MW. Shimato, as the turnkey contractor, will be responsible for the project's design, procurement, construction, and commissioning. The commercial terms and conditions, including the financial arrangements and revenue sharing mechanisms, will be finalized in the definitive agreements. The project's successful execution will contribute to India's renewable energy goals and position Constronics as a key player in the solar power sector.

About the Company

Constronics Infra Ltd, a company with roots in the pharmaceutical industry, underwent a transformative shift in fiscal year 2018. Founded in 1992, the company pivoted towards the construction and infrastructure sector, concentrating on the trading of essential building materials. Its product portfolio encompasses a diverse range of materials vital to construction projects, including manufactured sand (M-sand), plastering sand (P-sand), blue metal, ready-mix concrete, pre-mixed building materials, and solid blocks. These products, each serving specific construction purposes, contribute to the company's position as a significant player in the building materials market.

According to Quarterly Results, net sales increased by 20,213 per cent to Rs 13.81 crore, operating profit increased by 7650 per cent to Rs 1.24 crore and net profit increased by 17,386 per cent to Rs 1.22 crore in Q2FY25 compared to Q2FY24. In its annual results, net sales decreased by 6 per cent to Rs 0.77 crore and net profit increased by 1,158 per cent to Rs 0.72 crore in FY24 compared to FY23. Looking at its half-yearly results, net sales increased by 8,115 per cent to Rs 16.68 crore, operating profit increased by 2,162 per cent to Rs 1.20 crore and net profit increased by 3,312 per cent to Rs 1.16 crore in H1FY25 compared to H1FY24.

The company has a market cap of Rs 165 crore. The company's shares have an ROE of 118 per cent and an ROCE of 21 per cent. The stock gave multibagger returns of 820 per cent in 1 year and a whopping 2,885 per cent in 5 years. Investors should keep an eye on this micro-cap stock.

Disclaimer: The article is for informational purposes only and not investment advice.