Rs 7,000 Crore Order Book: This Engineering Firm's Shares Surge 5% Following a 40% Dip in Just One Week; Here's Why

The stock delivered multibagger returns of over 1,500 per cent in 5 years and has shown good profit growth of 52.1 per cent CAGR over the last 5 years with a PE of 25x and an ROE of 20 per cent.

Shares of Gensol Engineering Ltd surged over 5 per cent today, reaching an intraday high of Rs 352.90 per share from its previous closing of Rs 335.35 per share. The stock's 52-week high is Rs 1,377.10 per share, and its 52-week low is Rs 303 per share. On BSE, the company's shares experienced a volume spurt of over 12 times.

Gensol Engineering Limited (GEL) has reappointed Jabirmahendi Aga as CFO, replacing Ankit Jain, amidst recent credit rating downgrades from CARE and ICRA. GEL attributes these downgrades to a temporary liquidity mismatch, which it claims is being rectified by incoming customer payments. Aga, boasting over 14 years of experience and a previous tenure as GEL's CFO, will report to Chairman Anmol Singh Jaggi. GEL has denied falsification allegations and has formed a review committee. This leadership transition aims to reinforce financial stability during a period of scrutiny.

Despite financial challenges, GEL emphasises its robust order book exceeding Rs 7,000 crore and proactive debt management, having already reduced debt by approximately Rs 230 crore in the current financial year. The current debt stands at Rs 1,146 crore against reserves of Rs 589 crore, resulting in a debt-equity ratio of 1.95. GEL clarifies that the downgrades stem from temporary liquidity issues, which they are actively resolving. The company aims to restore stakeholder confidence by addressing these concerns transparently.

To achieve zero net debt, GEL is implementing a strategic deleveraging plan, which includes the sale of 2,997 electric vehicles for Rs 315 crore and the sale of a wholly owned subsidiary for Rs 350 crore. This is expected to reduce debt by Rs 665 crore and lower the debt-equity ratio to 0.8. The proceeds will directly address debt and working capital obligations. GEL commits to providing regular updates on its financial progress. The company is dedicated to returning to a strong financial footing.

"We are delighted to welcome Jabir back to the team and are confident that his expertise and experience will be invaluable in driving the company's future growth and success," said Anmol Singh Jaggi, Chairman & Managing Director of Gensol Engineering Limited. "His long-standing association with Gensol and his proven track record make him the ideal candidate to guide our financial operations. We are confident that his expertise will be invaluable as we navigate the current market landscape and drive our strategic growth initiatives. We are going through a challenging time, and Jabir is the best-suited person to lead us through it.”

“I would also like to take the opportunity to thank Ankit Jain for his contributions over the past months. His contributions have been instrumental, and we wish him all the best in his future endeavours,” added Anmol Singh Jaggi.

About the Company
Established in 2012, Gensol Engineering has emerged as a significant player in India's renewable energy and electric mobility sectors. Specialising in solar EPC, advanced tracking solutions through its acquisition of Scorpius Trackers, and the development of battery energy storage systems and green hydrogen infrastructure, Gensol is driving the transition to sustainable energy. Complementing its renewable energy focus, the company operates a state-of-the-art EV manufacturing facility in Pune and provides comprehensive EV leasing services to a diverse clientele, reinforcing its commitment to decarbonising transportation. With over 770 MW of solar projects completed, Gensol's diverse portfolio and experienced team of over 500 professionals position it as a leader in the evolving energy landscape.

Results: According to Quarterly Results, the net sales increased by 30 per cent to Rs 345 crore, and the net profit increased by 6 per cent to Rs 18 crore in Q3FY25 compared to Q3FY24. In its nine-month results, the net sales increased by 42 per cent to Rs 1,056 crore, EBITDA increased by 89 per cent to Rs 246 crore, and net profit increased by 34 per cent to Rs 67 crore in 9MFY25 compared to 9MFY24. Looking at its annual results, the net sales increased by 142 per cent to Rs 963 crore, and the net profit increased by 129 per cent to Rs 53.5 crore in FY24 compared to FY23.

The company has a market cap of over Rs 1,200 crore. The stock delivered multibagger returns of over 1,500 per cent in 5 years and has shown good profit growth of 52.1 per cent CAGR over the last 5 years with a PE of 25x and an ROE of 20 per cent. Investors should keep an eye on this small-cap stock.

Disclaimer: This article is for informational purposes only and does not constitute investment advice.