Rs 846.9 Crore Order Book: Mukul Agrawal-Backed Railway Equipment Company Registers Stellar H1FY25 Performance with a PAT growth of 191.3 Per Cent

The stock gave multibagger returns of 140 per cent in just 1 year and a whopping 500 per cent in 3 years.

Hind Rectifiers Ltd, established in 1958, is a leading manufacturer of power semiconductors, power electronics and railway transportation equipment. Their product portfolio includes traction and auxiliary transformers, IGBT propulsion systems, auxiliary converters, battery chargers, on-board DC rectifiers, traction motors, electrical switchboards, safety and protection electronics, rolling stock HVAC systems, electrostatic precipitators, high current rectifiers, power quality improvement equipment and special rectifiers. With a strong brand and market leadership, the company has been consistently improving its margins and expanding its product offerings to meet the growing demands of the Indian railways and industrial sectors.

The company has a market cap of Rs 1,891.4 crore and on Wednesday, shares of Hind Rectifiers Ltd hit a 5 per cent upper circuit to Rs 1,103.65 per share from its previous closing of Rs 1,051.10 per share. An ace investor, Mukul Agrawal owns a 1.39 per cent stake in the company. The stock gave multibagger returns of 140 per cent in just 1 year and a whopping 500 per cent in 3 years.

Key Financial Highlights for Q2FY25 are as follows:

• Revenue increased by 25.7 per cent YoY to Rs 166 crore in Q2FY25 from Rs 132 crore in Q2FY24
• EBITDA witnessed a growth of 72.2 per cent YoY to Rs 18.30 crore in Q2FY25 from Rs 10.6 crore in Q2FY24. The rise in EBITDA is attributed towards operating leverage reflecting better cost management and profitability
• PAT increased by 156.1 per cent YoY to Rs 10 crore in Q2FY25 from Rs 4 crore in Q2FY24

Key Financial Highlights for H1FY25 are as follows:

• Revenue increased by 31.5 per cent YoY to Rs 302 crore in H1FY25 from Rs 230 crore in H1FY24
• EBITDA grew by 90.04 per cent YoY to Rs 32.78 crore in H1FY25 from Rs 17.25 crore in H1FY24
• PAT jumped by 191.3 per cent YoY to Rs 17 crore in H1FY25 from Rs 6 crore in HIFY24. The PAT growth is largely driven by financial leverage and lower effective tax rate on a YoY basis
• The company maintains a stable Debt equity ratio of 0.92x
• The company clocked a ROCE of 22.34 per cent (Annualized) versus 12.04 per cent in FY24
• ROE stood at 24.53 per cent (Annualized) as compared to 10.59 per cent in FY24

During the first half of FY25, the company made significant strides in its railway segment. Key highlights include the successful launch of the Railway Propulsion System and Modular Pantry for Train 18, both developed entirely in-house. As of September 2024, the company boasts an impressive order book of Rs 846.9 crore, primarily driven by its strong pipeline of railway projects. The railway segment remains the company's core revenue driver, contributing approximately 95 per cent to the total revenue. To optimize operations and resource allocation, the Board approved the sale of the Dehradun plant, which accounted for a modest 2.05 per cent of the company's total revenue in FY24. The company's strategic focus on its core competencies, coupled with its strong order book and innovative product offerings, positions it for sustained growth in the railway sector.

Investors should keep an eye on this small-cap stock.

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