Gmr power share price

GMR Power’s Growth Potential: B&K Securities Initiates ‘Buy’ Coverage Amid Renewed Focus on Thermal Power

GMR Power and Urban Infra has captured investor attention as its shares surged by over 5% to Rs 141 on September 3, following the acquisition of a 1.2% stake by Authum Investment & Infrastructure. The purchase of 74.9 lakh shares at Rs 134 apiece was made through open market transactions. Additionally, B&K Securities has initiated ‘buy’ coverage on the stock, projecting a significant upside potential of 37% from current levels. This optimistic outlook is driven by the government’s renewed emphasis on thermal power, which positions GMR Power favorably for robust growth in the near future.

GMR Power’s Strong Market Performance

GMR Power and Urban Infra has demonstrated impressive performance throughout the year, with its stock more than doubling, up by 140%, compared to the benchmark Nifty 50’s 16% rise. The stock recently reached a 52-week high of Rs 140 on August 30, 2024, reflecting strong investor confidence and market momentum.

Expertise and Diversified Portfolio

GMR Power is well-established in sectors including energy, urban infrastructure, and transportation. The company’s diverse portfolio spans multiple segments such as power, roads, engineering, procurement, construction, and more. In the energy sector, GMR Power boasts an installed capacity exceeding 3,000 megawatts, supported by a balanced fuel mix of coal, gas, low sulphur heavy stock, and renewable energy sources like wind.

Strategic Expansion and Financial Revamp

B&K Securities highlights GMR Power’s strategic expansion into the smart meter sector as a key driver of future growth. Analysts are optimistic about the company’s business revamp strategy, which includes a heightened focus on energy generation, utility services, and electric vehicle (EV) charging infrastructure. Moreover, GMR Power has successfully restructured its balance sheet through favorable settlements, positioning the company for sustained financial health.

Impressive Financial Performance

GMR Power’s recent financial performance has been strong, particularly in the first quarter of FY25. The company reported a total income of Rs 1,740 crore, marking a 46% year-on-year increase, driven by the consolidation of GMR Energy entities. Additionally, GMR Power achieved a significant turnaround with a profit of Rs 1,360 crore in Q1FY25, compared to a loss of Rs 200 crore in the same period last year. Operationally, the company’s EBITDA rose by 12% YoY to Rs 640 crore, with margins improving to 38%.

Conclusion:

GMR Power’s solid market performance, diversified portfolio, strategic expansions, and strong financial results make it a compelling investment. With B&K Securities’ ‘buy’ recommendation and the government’s renewed focus on thermal power, the company is well-positioned for future growth, offering investors significant upside potential.

FAQs:

1.Why did GMR Power’s stock surge on September 3?

A. The stock jumped over 5% due to Authum Investment & Infrastructure purchasing a 1.2% stake in the company via open market transactions.

2.What is the new coverage by B&K Securities?

A. B&K Securities initiated a ‘buy’ coverage on GMR Power, predicting a 37% upside potential from current levels.

3.How has GMR Power performed this year?

A. The stock has more than doubled, rising 140%, significantly outperforming the Nifty 50 index’s 16% gain.

4.What sectors does GMR Power operate in?

A. GMR Power operates in energy, urban infrastructure, and transportation, with segments including power, roads, engineering, procurement, and construction.

5.What is GMR Power’s installed energy capacity?

A. The company has an installed capacity of over 3,000 megawatts, with a balanced fuel mix including coal, gas, and renewable energy sources.

6.What are GMR Power’s recent strategic expansions?

A. GMR Power is expanding into the smart meter sector and focusing on energy generation, utility services, and EV charging infrastructure.

7.How did GMR Power perform financially in Q1FY25?

A. GMR Power reported a total income of Rs 1,740 crore, a 46% YoY increase, and a profit of Rs 1,360 crore, compared to a loss of Rs 200 crore in the same period last year.

8.What is B&K Securities’ outlook on GMR Power?

A. B&K Securities believes GMR Power is well-positioned for future growth, with a favorable outlook due to the government’s renewed focus on thermal power.

9.How has GMR Power’s EBITDA and margins changed?

A. The company’s EBITDA increased by 12% YoY to Rs 640 crore in Q1FY25, with margins improving to 38%.

10.What makes GMR Power a compelling investment?

A. GMR Power’s strong market performance, strategic expansions, and impressive financial results, combined with B&K Securities’ ‘buy’ recommendation, make it an attractive investment opportunity.