Small-Cap Stock Hits 5% Upper Circuit | Here’s Why
Stocks in News |On Monday, Servotech Power Systems witnessed a significant uptick, hitting a 5% upper circuit at Rs 169.40 on the National Stock Exchange (NSE). This surge was driven by the company's acquisition of a substantial government contract through the Uttar Pradesh New & Renewable Energy Development Authority (UPNEDA). Under the "Kusum Component C-1 Scheme," Servotech has been tasked with the deployment of 1,100 Grid-connected Agriculture Pumps, signaling a significant leap in their expansion efforts.
Details of the Contract
The contract, valued at approximately Rs 31 crore, covers a comprehensive scope of responsibilities for Servotech. This includes the manufacturing, supply, installation, testing, and commissioning of the grid-connected pumps alongside solar power plants. The project will feature pumps with 2 HP, 3 HP, and 5 HP capacities, paired with solar plants of 3 kW, 4.5 kW, and 7.5 kW.
A significant aspect of this project is the five-year comprehensive warranty and maintenance agreement that accompanies both the pumps and the solar installations. With the deployment of 1,094 solar pumps, this initiative is poised to substantially boost renewable energy efforts across Uttar Pradesh.
Servotech Financial Performance Highlights
The contract win comes at a time when Servotech Power Systems is already showing strong financial performance. For the September quarter of the fiscal year 2024-25, the company reported a consolidated net profit of Rs 11 crore, a more than threefold increase from Rs 3 crore during the same period last year.
This boost in performance was driven by a notable rise in income, which surged to Rs 200 crore from Rs 86 crore in the year-ago quarter. Over the first half of the fiscal year, Servotech’s net profit has also doubled to almost Rs 16 crore, up from Rs 7 crore in the previous fiscal year.
About Servotech Power Systems
Servotech specialises in manufacturing energy-efficient lighting solutions, serving residential, industrial, and commercial sectors. Their comprehensive product lineup includes LED light bulbs, downlights, floodlights, panel lights, tube lights, bay lights, and outdoor lighting options like streetlights and floodlights. The recent developments at Servotech also highlight its growing prominence in the renewable energy sector.
Should You Buy Servotech Power Shares?
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