Active Stocks
Wed Jun 19 2024 12:13:47
  1. Tata Steel share price
  2. 180.45 -0.39%
  1. HDFC Bank share price
  2. 1,633.00 1.51%
  1. State Bank Of India share price
  2. 848.00 0.40%
  1. ICICI Bank share price
  2. 1,143.00 1.78%
  1. Wipro share price
  2. 493.20 0.27%
Business News/ Markets / Stock Markets/  Schneider Electric stock hits 5% lower circuit for 4th day in a row, down 22% from recent high – here's why
BackBack

Schneider Electric stock hits 5% lower circuit for 4th day in a row, down 22% from recent high – here's why

Schneider Electric Infrastructure shares hit the 5% lower circuit limit for the fourth consecutive day, falling from ₹916 to ₹746.30. Q4 earnings showed a 92.7% drop in net profit due to increased expenses.

Schneider Electric Infrastructure: Despite the recent sell-off, the stock boasts a multibagger return of 215% in the past year and an impressive 611% over the last five years, showcasing its consistent performance. (Pixabay)Premium
Schneider Electric Infrastructure: Despite the recent sell-off, the stock boasts a multibagger return of 215% in the past year and an impressive 611% over the last five years, showcasing its consistent performance. (Pixabay)

Schneider Electric Infrastructure, a prominent player in the heavy electric equipment industry, has seen its shares hit the 5% lower circuit limit for the fourth consecutive day on Wednesday. During this period, the shares have fallen from 916 apiece to the current level of 746.30, marking an 18.52% decline.

This recent drop has also led the stock to correct 22% from its recent all-time high of 954.35. The downturn followed the company's Q4 earnings, which failed to meet market expectations.

Despite the recent sell-off, the stock boasts a multibagger return of 215% in the past year and an impressive 611% over the last five years, showcasing its consistent performance.

The company on May 23 released its March quarter numbers, reporting a 92.7% decline in the net profit to 3.28 crore, primarily due to a sharp increase in operating expenses, which rose to 398.54 crore from 349.55 crore in Q4 FY23. 

Also Read: Crude oil prices hit 4-week high on OPEC+ cut expectations, heightened Middle East tensions

Additionally, finance costs jumped to 32.38 crore from 14.34 crore in Q4 FY23. Revenue from operations for the quarter increased by 15% YoY, reaching 471.75 crore from 410.51 crore.

Despite the quarterly setback, the company's net profit for the full fiscal year (FY24) improved to 172 crore from 124 crore in FY23, while revenue from operations rose to 2,207 crore from 1,777 crore, according to the company's Q4 investor presentation. 

Earlier, global brokerage firm Goldman Sachs maintained a cautious outlook on the stock, citing the sharp rise in share value in recent years. The brokerage initiated a 'Sell' rating on the stock, setting a 12-month target price of 470 apiece, due to perceived expensive valuations.

Also Read: Elections 2024: Defence, power, industrials among sectoral picks ahead of result

However, the brokerage remains optimistic about the company's future prospects, believing it will benefit significantly from the Indian government's Revamped Distribution System Scheme (RDSS), which is part of power distribution sector reforms. 

With expectations of driving a US$37 billion capital expenditure (capex) in distribution system expansion and strengthening over the next five years, the RDSS holds immense potential. Currently, projects worth US$14 billion have been sanctioned under the scheme, the brokerage said.

Also Read: PE ratio ineffective for valuing certain sectors and stocks in India: Kotak

Meanwhile, over the weekend, Capgemini and Schneider Electric announced a new collaboration focused on energy optimisation.

Schneider Electric, headquartered in India, specialises in power distribution, manufacturing, designing, and servicing advanced products and systems for electricity distribution. These include distribution transformers, medium voltage switchgear, protection relays, and various electricity distribution and automation equipment.

Also Read: Transformers and Rectifiers: Up 686% in a year, here's why it is still a good 'buy'

 

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.

3.6 Crore Indians visited in a single day choosing us as India's undisputed platform for General Election Results. Explore the latest updates here!

Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More Less
Published: 29 May 2024, 04:16 PM IST
Next Story footLogo
Recommended For You
GENIE RECOMMENDS

Get the best recommendations on Stocks, Mutual Funds and more based on your Risk profile!

Let’s get started