This Micro-Cap Stock With 30.92 per cent Monthly Returns and Rs 262 Crore Order Book Expanding Data Centre Opportunities

The stock has given returns of 30.92 per cent returns in the last one month.

Lakshya Powertech Ltd with a strong order pipeline, expanding margins and a reasonable valuation Lakshya Powertech is here to convert ambitions in realities. The company has completed over 138 projects worth Rs 137 crore and has an order book of Rs. 262 crore (1.7x of FY24 revenue), supporting growth.

Founded in 2012, Lakshya Powertech Limited has emerged as a multi-vertical engineering services company, driving growth across four key divisions. In FY24, the company derived 44 per cent of its revenue from EPCC turnkey solutions for Oil & Gas, Power, and Renewable projects, 53 per cent from Integrated Operations & Maintenance (O&M) services, 3 per cent from Special Services such as testing and commissioning critical infrastructure, and a small share from spare parts trading. Lakshya has completed 138 projects valued at Rs. 137 crore and maintains an order book of Rs. 262 crore, equivalent to 1.7x its FY24 revenue, ensuring robust growth in the medium term.

Geographically, the company’s revenue is diversified, with 43 per cent originating from Jharkhand, 22 per cent from Rajasthan, and 15 per cent from Maharashtra. In FY24, revenue increased to Rs 148 crore. Strong execution in EPCC contracts and entry into the data centre market are expected to drive this growth. EBITDA margins improved from 9 per cent in FY23 to 14.8 per cent in FY24, supported by high-margin EPCC contracts and critical O&M services. PAT for FY24 stood at Rs 16 crore, representing a margin of 10.8 per cent.

Lakshya Powertech has established a strong clientele, including ONGC, HPCL, and L&T, supported by a skilled workforce of 912 employees, of which 800 are technical experts. Its strategic facilities in Ahmedabad and Hyderabad position the company close to key industrial hubs.

Expansion into emerging segments presents growth opportunities. The Indian data centre market, projected to grow from 0.9 GW in 2023 to 2 GW by 2026, is a key focus area. Lakshya expects data centre-related revenue to increase from 10 per cent to 25 per cent of its total revenue within two years, leveraging its expertise in emergency backup systems. Additionally, the company is exploring high-value O&M services for compressed biogas (CBG) and biomass gasification systems, with an ongoing project for HPCL showcasing its potential.

Despite its strengths, Lakshya faces challenges such as revenue concentration risk, with 71.5 per cent of revenue derived from its top five clients, and execution risk in new segments like data centres. Success in these areas hinges on scaling capabilities and securing high-value contracts.

With a robust order book, expanding margins, and a strategic shift towards high-growth sectors, Lakshya Powertech is well-positioned for exponential growth. Strong relationships with data centre giants like SIFY, Nxtra, and Amazon further bolster its prospects in this lucrative segment.

The shares of the company are trading at Rs 347 with a market cap of Rs 349 crore. The stock has given returns of 30.92 per cent returns in the last one month. Investors should keep this micros-cap stock on the radar.

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