Auto ancillary stock surges by 5% as it hits the upper circuit following the acquisition of a ₹1,412 crore order from RVNL
Auto ancillary stock: The shares of Exicom Tele-Systems Ltd, a critical power systems provider, surged by 5 percent to hit the upper circuit after securing a prestigious work order from Rail Vikas Nigam Limited worth Rs 1,412 crore. This achievement boosted the company’s market capitalization to Rs 2,949.33 crore, with shares trading at Rs 244.10 each, marking a 5 percent increase from the previous closing price of Rs 232.50.
The rise in share value can be attributed to the recent purchase order from Rail Vikas Nigam Limited for the supply of telecom equipment, including power systems and racks, along with maintenance services for 10 years in Uttar Pradesh (East) Telecom Circle and Uttar Pradesh (West) Telecom Circle.
In terms of financial performance, Exicom Tele-Systems Ltd reported a 19 percent increase in revenue from Rs 190 crore in Q2FY24 to Rs 153 crore in Q2FY25. However, net profit saw a significant decline of 194 percent, dropping from Rs 18 crore to a loss of Rs 17 crore during the same period.
The company’s revenue breakdown shows Rs 105 crore from Critical Power and Rs 43 crore from EV Chargers, totaling Rs 315 crore and Rs 76 crore respectively. EBITDA margins were slightly impacted by the acquisition of Tritium, a global EV charging company.
In segment updates, the EV charging sector experienced a slight decline in the first half of the year due to slower electric vehicle sales. However, the launch of new models in October led to increased sales, with growth expected to continue, supported by government policies promoting electric buses, trucks, and expanded sales channels.
Revenue in the critical power segment remained steady in H1 FY25, reflecting the cyclical nature of the telecom industry. The company is actively involved in significant government projects such as BharatNet, indicating a promising outlook for future growth.
Acquisition:
Exicom has recently acquired Tritium, a renowned global leader in DC charging technology. This strategic move has significantly expanded Exicom’s addressable market from ₹9,000 crores to ₹90,000 crores. Tritium boasts an impressive track record, having deployed 10,000 chargers in 47 countries. The integration process is estimated to span a year, with management expressing confidence in the long-term revenue and profitability growth potential.
Market Position:
Exicom currently commands a dominant market share in home charging, exceeding 50%, and is a frontrunner in public charging infrastructure. Despite facing competition in securing public contracts, the company remains steadfast in its commitment to delivering long-term value and top-notch product quality. Management maintains an optimistic outlook on growth prospects, even amidst challenges in the EV and critical power sectors.
Future Outlook:
Looking ahead, Exicom foresees a 10% annual growth in telecom infrastructure and a remarkable 30-40% compound annual growth rate (CAGR) in the EV charging market over the next five years. The management’s strategic focus lies in preserving market share and expanding the business with existing customers through a blend of innovation, reliability, and strategic expansion initiatives.
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Disclaimer: This blog post is for informational purposes only and should not be considered financial advice. Investors should conduct thorough research and consult with a qualified financial advisor before making any investment decisions.