Multibagger stock: Supreme Power Equipment share price jumps 235% in 6 months; should you buy or avoid the stock?

  • Multibagger stock: Supreme Power Equipment share price has surged by 235% in just over six months, with a roller coaster ride marked by sharp declines and significant increases. Technical analysts predict a bearish trend towards 300 levels, advising investors to avoid it for now.

Dhanya Nagasundaram
First Published10 Jul 2024, 02:56 PM IST
Multibagger stock: Supreme Power Equipment, a Tamil Nadu-based firm specialising in transformers, saw its share price rise by 235% in six months but faced sharp declines in February and March. (Image: Pixabay)
Multibagger stock: Supreme Power Equipment, a Tamil Nadu-based firm specialising in transformers, saw its share price rise by 235% in six months but faced sharp declines in February and March. (Image: Pixabay)

Multibagger stock: In just over six months, Supreme Power Equipment share pricehas shot up by 235%. Since its debut on December 29, 2023, the shares of the firm that manufactures, upgrades, and renovates numerous types of transformers have seen a roller coaster ride.

Supreme Power Equipment share price, which is listed at 102.9, is now trading on the NSE at 320 per share on Wednesday session. In January, the Supreme Power Equipment share price surged by almost 73%. However, in February and March, there was a sharp decline in the stock price, with drops of 22% and 16%, respectively. On the other hand, the stock increased by 51% in April, 11% in May, and 70% in June.

Even though Supreme Power Equipment shares began July at an all-time high, the stock could not sustain its gains through the initial week. According to technical analysts, on Wednesday's session, it slumped over 4% and has been down more than 14% this week. As of now, momentum is on the bearish side and can head towards 300 levels. Investors should avoid it for now.

 

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The Tamil Nadu-based firm had a consolidated revenue of 113.59 crore, an EBITDA of 23.33 crore, and profit after tax of 14.30 crore in FY24, according to exchange filing.

"We are pleased to report impressive financial performance for FY24 and H2FY24, with double-digit growth in both top line and bottom line, and an improvement in EBITDA margin to ~21%. This achievement is driven by strong demand from the power sector, strategic focus on supplying power transformers, innovation, and stringent cost control measures.

In response to the expanding power industry, bolstered by government initiatives, we are increasing our production capacity from 2,500 MVA to 9,000 MVA. This expansion will be housed in a new 150,000 sq ft facility, expected to be operational by Q1 FY26.

 

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Looking ahead, we aim to focus on high-margin, large power transformers and explore opportunities in the wind and solar segments, positioning the company for sustained future growth,” said Vee Rajmohan, Chairman and Managing Director of the company.

The company received fresh orders of 12.41 crore for March. Due to the inflow of orders, the order book at the end of March 2024 was valued at 51.35 crore, with orders from other private companies totalling 24.97 crore and orders from the government valued at 26.38 crore.

Supreme Power Equipment IPO was enthusiastically received by investors across all categories, with the offering being subscribed more than 262.60 times. The initial public offering of Supreme Power Equipment Ltd began on December 21 and wrapped up on December 26. The total of 71.8 lakh shares offered in the 46.67 crore Supreme Power Equipment IPO were issued as fresh issues, with each equity share priced between 61 and 65.

Supreme Power Equipment Ltd was established in 1994 and specialises in the production, modernisation, and restoration of several kinds of transformers. A few of these include rectifier transformers, power transformers, energy-efficient transformers, windmill transformers, distribution transformers, isolation transformers, solar transformers, and converters.

Its whole product line is heavily skewed toward the power industry, specifically the conventional and renewable power sectors. It provides electricity firms in India with an import support strategy that delivers high-quality, reasonably priced solutions. The business has so far supplied transformers to a range of clientele. Public utility firms and the wind mills section are examples of these client segments.

 

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Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decisions.

 

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First Published:10 Jul 2024, 02:56 PM IST
HomeMarketsStock MarketsMultibagger stock: Supreme Power Equipment share price jumps 235% in 6 months; should you buy or avoid the stock?

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