THIS small-cap stock soars 10% to hit the upper circuit after bagging a contract from Reliance Industries

A small-cap stock, South West Pinnacle, surged as much as 10 per cent to hit its upper circuit of ₹165.27 in opening deals on the NSE on Wednesday, January 1, after it announced it won a contract of ₹158 crore for CBM (coal bed methane) production from Reliance Industries.

South West Pinnacle Exploration provides end-to-end drilling and exploration of natural resources, such as coal, ferrous, non-ferrous and atomic minerals, and conventional oil and gas and groundwater investigation.

“South West Pinnacle Exploration, an integrated end-to-end drilling and exploration service provider across all natural resources, has recently been awarded an extension of the contract for CBM production from Reliance Industries, one of the well-known private sector companies in India, for production hole drilling for coal bed methane (CBM) in Madhya Pradesh,” the company said in an exchange filing on January 1.

“With this extension, the present operations will be doubled with the deployment of a new set of rigs and equipment with additional manpower. The aggregate value of this extension of the contract is over ₹158 crore,” the company said.

The company further added that it had successfully completed two Reliance projects in the same domain and has been executing phase 1 of the contract for over 14 months. So, this extension in the contract, as phase 2, with three more possible extensions of six months each, would make a sizable increase in the company’s order book, with assured business in the medium to long run.

According to Vikas Jain, Chairman and Managing Director of the company, this extension of the ongoing contract will almost double the present revenue from Reliance.

"Total contract value on which company is presently working has gone up to ₹495 crore. The overall order book is now at its all-time high with record orders worth ₹309 crore added during the first nine months of the current financial year alone," said Jain.

South West Pinnacle share price trend

The stock declined 11.41 per cent in the calendar year 2024. However, despite weakness in the broader market, it has seen decent buying interest in the last two months. In November, the stock jumped almost 17 per cent, while in December, it gained over 5 per cent.

The small-cap stock hit a 52-week high of ₹183 on January 2 last year and a 52-week low of ₹98.10 on March 13 last year.

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