Upper circuit buzz: Small-cap multibagger stock submits Rs 100 crore investment MoU under Gujarat Government Defence Policy; achieving highest-ever revenue and order book!
The stock has delivered remarkable returns in the last three months, marking a gain of 148 per cent, establishing itself as a multibagger.
Indian benchmark indices experienced profit booking in the last half-hour, with Nifty slipping more than 150 points from the day's highs, dropping below the 21,600 mark. The primary contributors to this decline were banking and financial stocks, with HDFC Bank, Axis Bank, and ICICI Bank emerging as the top three draggers for the index.
Meanwhile, the broader indices, Nifty Mid-Cap and Small-Cap, demonstrated positive trends, rising by 0.13 per cent and 0.29 per cent, respectively. Amidst this market turbulence, a small-cap stock that has garnered attention is Macpower CNC Machines Ltd, currently locked at an upper circuit limit of 5 per cent at Rs 742.
Opening the day at Rs 720, the stock hit an intraday low of Rs 697. Presently, it is trading near the day's peak, attributed to a significant development: Macpower CNC Machines Ltd submitted its Memorandum of Understanding (MoU) to the Gujarat Government for "The Tenth Vibrant Gujarat Summit 2024." Under the Gujarat Government Defence Policy, the company plans to establish a CNC Machine manufacturing facility focused on aerospace and defence, with an investment of up to Rs 100 crore. The initial setup is expected to take 12-18 months post land allocation by the state government.
The full-scale capacity expansion of the project on the targeted land will occur gradually, accompanied by backward integration to ensure self-sufficiency in raw materials, casting, and patents. The company will receive various subsidies from the state government, encompassing land procurement, interest subsidies, SGST (State GST) benefits, power tariff incentives, electricity duty exemption, skill development assistance, and capital subsidy for R&D.
Rupesh Mehta, Chairman & Managing Director, expressed enthusiasm about this pioneering project under the state's new Aerospace & Defence Policy. He emphasized the company's commitment to systematic growth, anticipating a significant portion of revenues from the Aerospace and Defence Sector. The new facility, four times the size of the existing one, aims to establish the company as a substantial player in the industry over the next decade.
By the end of FY24, the company aims to achieve an annual capacity of 2000 machines in its existing facility. Notably, the order book and execution remain robust, with the company being debt-free. In Q2FY24, the company reported its highest-ever revenue, order book of Rs 190.8 crore, and net profit for any quarter. The company's focus on the defence and aerospace sector is evident from submitted bids worth Rs 176 crore currently under evaluation.
The stock has delivered remarkable returns in the last three months, marking a gain of 148 per cent, establishing itself as a multibagger.