Markets
This renewable energy stock is up 10,000% in 5 years
Summary
- The company’s board recently approved a stock split along with rewarding shareholders with bonus shares.
With the finance minister's announcements in the Union Budget, India's focus on renewable energy has evidently accelerated, positioning the country as a burgeoning leader in the global shift towards sustainable energy.
The Indian government's initiative to solarize the rooftops of 1 crore households underscores a significant commitment to solar energy. Furthermore, the budget has provided a significant boost to another key component of the renewable sector – wind energy.
Renewable energy sources, known for generating power at lower costs, are propelling industries to make substantial investments in renewable energy production and innovation.
This brings us to the stock that we want to discuss in this article, which caters to the renewable space, or at least had the word ‘renewable’ in its name.
About SG Mart
Previously operating under the name Kintech Renewables, SG Mart has made a name for itself within the renewable energy sector. The company, an independent power producer, specializes in power generation alongside offering EPC services for turnkey renewable power projects, including wind and solar energy solutions.
SG Mart boasts a prestigious client roster featuring names like Suzlon, Vestas, Gamesa, Regen, and Global Wind, highlighting its diverse engagement in the renewables business.
An interesting thing to note is that the company was engaged in the renewables business, but its current business is diversified. SG Mart now also engages in the trading of building material products in India.
What explains the 10,000% rally?
SG Mart's stock has witnessed an extraordinary surge of over 10,000% in the past five years, rising from ₹100 in May 2019 to an impressive ₹10,600 as of now.
This remarkable growth, particularly evident in the past two years amid the government's push for clean energy, has positioned the company as a standout in the AMFI list for percentage gains.
The company's market capitalization saw a dramatic increase to ₹21 billion during July-December 2023 from ₹790 million in January-June, prompting a strategic decision to split its shares and issue bonus shares, aiming to enhance liquidity and shareholder value.
Under the leadership of Sanjay Gupta, known for his transformative contributions to the Apollo group, SG Mart is taking ambitious steps, including a notable partnership with Akshay Kumar as its brand ambassador and plans to address the vast unorganized market in building materials.
Reports suggest that a merger could be on the cards with APL Apollo, which already has a distributor chain.
Despite the excitement around SG Mart's rally and its strategic moves, investors should remain mindful of potential market corrections, as seen in the US renewable sector in 2021.
The company's success hinges on its ability to maintain profitability and revenue growth amidst evolving market dynamics.
As SG Mart approaches its stock split and bonus issue, the market's bullish sentiment is palpable. However, investors are advised to keep a close watch on the company's fundamentals and its forthcoming performance in the highly volatile renewable energy market.
It also remains to be seen how the stock performs in the coming months.
Happy Investing!
Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such.
This article is syndicated from Equitymaster.com
