AXISCADES Tech stock rise

AXISCADES Tech Rises After Subsidiary Secures Long-Term Contract with Highview Power

AXISCADES Technologies saw its stock rise by 2.33%, reaching ₹555.90, following the announcement that its subsidiary, Epcogen, has secured a long-term contract with Highview Power, a UK-based energy storage technology company.

About Highview Power: Highview Power is a globally recognized leader in developing long-duration energy storage technology using renewable sources. The company specializes in liquid air energy storage (LAES), a cutting-edge technology that enables efficient and sustainable energy storage solutions.

Carrington Power Project: Highview Power has recently raised capital to initiate its first large-scale project, the Carrington Power Project, located in Manchester, UK. This project will feature the world’s largest LAES facility, boasting a capacity of 50 MW and 300 MWh (six-hour) of long-duration energy storage. The facility will be capable of providing power to over 1 million homes in the UK. Construction of the Carrington facility is set to begin immediately, with commercial operations expected to commence in 2026.

Role of Epcogen: Epcogen has been entrusted with providing multi-discipline engineering services for the Carrington Power Project. These services include process detailing, technical safety, static and rotary equipment, piping, civil and structural work, electrical systems, instrumentation, and telecommunications. Epcogen began front-end engineering design (FEED) for the project in mid-2022, and pre-engineering activities continued until 2024, helping to build investor confidence for the EPC (Engineering, Procurement, and Construction) execution stage.

Future Collaborations: In addition to the Carrington facility, Epcogen is involved in the FEED activities for Highview Power’s future larger-scale projects, which are expected to have a total capacity of 2.5 GWh. AXISCADES and Epcogen are poised to play a crucial role in these upcoming projects as well.

Statement from AXISCADES CEO: Arun Krishnamurthi, CEO and Managing Director of AXISCADES, expressed excitement about the partnership with Highview Power, describing it as a transformative and pioneering project. He emphasized that this contract presents a significant opportunity to enhance AXISCADES’ engineering expertise and commitment to supporting innovative and sustainable energy solutions.

Company Performance: AXISCADES Technologies, which provides engineering design services across various sectors including aerospace, defense, heavy engineering, automotive, and industrial products, reported a net profit of ₹17 crore in Q1 FY25. This is nearly three times the profit recorded in Q1 FY24, where the profit stood at ₹6 crore. Revenue from operations for the quarter amounted to ₹223 crore, reflecting a 4.5% year-on-year increase. In dollar terms, the company’s revenue was $26.9 million, a 2.5% increase year-on-year.

Advantages

1. Long-Term Contract: The contract with Highview Power ensures steady revenue for Epcogen, providing financial stability and potential for growth in the energy storage technology sector.
2. Pioneering Technology: Highview Power’s liquid air energy storage (LAES) technology is cutting-edge, and involvement in such projects positions AXISCADES as a leader in the field of innovative energy solutions.
3. Global Exposure: The partnership with a UK-based company gives AXISCADES and Epcogen international exposure, enhancing their reputation and opening doors for future global projects.
4. Increased Engineering Proficiency: Working on the world’s largest LAES facility will enhance the engineering skills and expertise of AXISCADES and Epcogen, which can be leveraged in future projects.
5. Sustainability Focus: The project aligns with the global shift towards renewable energy, improving AXISCADES’ sustainability credentials and attractiveness to eco-conscious investors.

Disadvantages

1. Execution Risks: Large-scale projects like the Carrington Power Project come with significant execution risks, including potential delays and cost overruns.
2. Dependence on Highview Power: A long-term contract with one company might create over-reliance on Highview Power, which could be risky if the partnership faces challenges.
3. Regulatory Challenges: As the project involves advanced technology and energy storage, there might be regulatory hurdles that could impact the project’s timeline and costs.
4. Market Competition: The energy storage sector is competitive, and maintaining a leading position requires continuous innovation and investment.
5. Currency Fluctuations: As the project is based in the UK, currency exchange rate fluctuations could impact revenue and profitability.

Conclusion

The partnership between AXISCADES’ subsidiary Epcogen and Highview Power is a significant milestone, positioning both companies at the forefront of the renewable energy storage sector. The Carrington Power Project, which will feature the world’s largest LAES facility, is a landmark achievement in sustainable energy solutions. While there are inherent risks, such as execution challenges and market competition, the advantages of global exposure, cutting-edge technology, and long-term revenue potential outweigh the disadvantages. This collaboration is poised to enhance AXISCADES’ reputation in the engineering services industry and contribute to future growth.

FAQs

1. What is the Carrington Power Project?
   • The Carrington Power Project is a large-scale energy storage facility in Manchester, UK, featuring the world’s largest liquid air energy storage (LAES) facility. It is expected to provide power to over 1 million homes in the UK.
2. What role does Epcogen play in the Carrington Power Project?
   • Epcogen, a subsidiary of AXISCADES, is responsible for providing multi-discipline engineering activities for the project, including process detailing, technical safety, and civil & structural work.
3. Why is this project significant for AXISCADES?
   • This project enhances AXISCADES’ engineering proficiency, provides long-term revenue, and positions the company as a leader in innovative energy solutions, particularly in the renewable energy sector.
4. What are the risks associated with this project?
   • The risks include potential execution delays, cost overruns, dependence on Highview Power, and regulatory challenges that could impact the project’s timeline and profitability.
5. How does this project align with AXISCADES’ future goals?
   • The project aligns with AXISCADES’ focus on sustainability and innovation, and it provides a platform for future growth in the global energy storage and engineering services markets.

AXISCADES Tech stock rise

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