This smallcap heavy electrical equipment stock has zoomed 113% in 5 months

GE Power India in an exchange filing on Thursday said it bagged contracts worth Rs 775 crore from Jaiprakash Power Ventures.

Shares of GE Power India Limited (GEPIL) hit a new high at Rs 371, as it rallied 12 per cent on the BSE in Thursday's intra-day trade backed by heavy volumes after the company bagged contracts worth Rs 775 crore from Jaiprakash Power Ventures.

In an exchange filing, GE Power said that the company bagged contract worth of Rs 490.50 crore plus (GST 18 per cent) from JP Ventures for DE&E, supply, transportation, technical field advisors (TFA) for erection & commissioning and conducting PGT of flu gas desulphurisation systems (FGD) for Nigrie Super Thermal Power Plant at Nigrie. The order is to be executed in 33 months.

The company bagged second order amounting of Rs 284.40 crore plus (GST 18 per cent) from JP Ventures for D&E, Supply & TFA of wet limestone based FGD for Bina Thermal Power Plant at Bina. This order has to be executed in 30 months.

Meanwhile, in the past 10 trading days, the stock of the smallcap heavy electrical equipment company has surged 55 per cent. In the past five months, the market price of the company zoomed 113 per cent.

At 02:50 pm; GEPIL was trading 5.5 per cent higher at Rs 350.05, as compared to 0.64 per cent rise in the S&P BSE Sensex. The trading volumes at the counter jumped nearly three-fold, when compared wits two-week average, with a combined 3.3 million shares changing hands on the NSE and BSE.

GEPIL is one of the leading players in the Indian power generation equipment market. With Steam Power contributing to the majority of the business, GEPIL also houses Hydro and Gas business projects. The company has manufacturing units in Durgapur, West Bengal and Noida and several sales offices and workshops present countywide.

GEPIL in an investor presentation on Wednesday said 97 gigawatts (GW) of FGD are yet to be ordered in the Indian power market. The balance market is predominantly IPP and State Utility around Rs 60,000 crore. The market progress is subject to adherence or no further relaxation from regulators. The current deadline is 2026, the company said.

According to McKinsey's, the trajectory of global power demand is set to surge across sectors in the coming years. The notable surge is expected in the transport sector driven by rapid growth in the electrical passenger's vehicle.

After 2 consecutive years of strong gains, India's electricity consumption surpassed that of Japan and Korea combined at the end 2023, bolstered by a fast-growing economy and powered by increased electrification. India's electricity demand is expected to rise by an average of 6.5 per cent over the '24 to '26 period.

India is posed for this fastest growth rate through 2026 among major economies. Over the next 3 years, India will add electricity demand roughly equivalent to the current consumption of the United Kingdom. 1/3 of this incremental electricity demand is expected to come from rising coal-fire generation, the company said.

Currently out of the total capacity of 207 GW, only 22 units with a capacity of about 9.38 GW less than 5 per cent have been fitted with flue-gas desulfurization or FGD systems. This indicates the need for implementation of FGDs in the Power sector to resume sulphur emissions and enhance efficiency of the units.

GEPIL is a prominent player in this technology, and the management is hopeful of the government accelerating compliance of installation of FGDs over the next couple of years.