PG Electroplast: Promoter Stake Sale & Institutional Moves:-
Some important companies and some important updates related to them The name of the first company is PG Electropls LED. Disclaimer that all the company related news and updates that we will cover are only for educational purposes. So do not consider this as any kind of investment advice. You can also do your own research and analysis. About some important news and updates related to PGL Aproproplast. So friends, if we talk about the last one and a half to two months, then we got to hear a news about this company due to which this company was seen to be constantly in focus.
Shareholding Pattern Confirms the Sale:-
A report related to PG Electroplast was published. In the report it was mentioned that the promoters of this company are planning to sell their stake and how will they sell the stake? Through Block Dell in which the number of Rs 1177 crore will come as the stake they want to sell. Now how much was the exact stake mentioned brother? So there was 5.62% mention. But all these things were not official. At one time we were hearing all these things through reports. After that, after a few days or we can say after a day or two, we also saw this news getting officially confirmed in PG Electroplast when we witnessed a huge fall in PG Alloplast and many sources claimed that the promoters of the company have diluted their stakes through block deal. Now you will get to see separate data regarding the amount wagered there. But as of now, the promoter had sold the stake. This thing was completely confirmed somewhere. Now after this the important question was that if the promoter has sold the stake through a block deal then it is possible that you may see the stake going to some other fund house. Be it a foreign fund house or an Indian one.
Growth Uncertainty & Sector Commentary:-
But the important thing is whether the entire 5.6% stake has gone to the fund house or we are also seeing that stake going to the rest of the public as well. It was important to see this. So, when will we find out ? When the company will be seen updating its quarter one share holding pattern. And the share holding pattern of this company has been finally updated. If we about the promoter’s stake in the company, it was seen at 49.37% in the last quarter. This time it has reduced to 43.72%. That means the things we heard are also visible in the share holding pattern. And talking about FI, their stake increased from 10.45% to 13.02%. That means when the promoter sold his stake, the FI also increased its stake. Same thing is being seen in DI also. Stake was 16.37% in Q4. Currently it is 18.09%. That means DI has also increased its stake. But when we talk about the public, we have seen the public’s stakes also increasing. That is, it can be said that the entire 5.62% stake that belongs to the promoter has not gone to FI and DI. He has also reached out to the public somewhere. And often the public stakes increase in those companies in which there is uncertainty regarding growth. Now look friends, there is uncertainty regarding the growth of this company in the sector as well. Now it works on EMS division.
You all know it. Now, there are many more companies which are working in this and the commentary of the brokerage houses regarding many companies was showing that we may see a slight slowdown in the growth in the future. And this is big news for the investors of a company like Dixon Technology and the investors of PG Electroplast. Because the growth rate that we have seen in this company, if we look only at the profit in the last 3 years, the company has grown its profit at 100% CGRP. And last year also the company had grown its profit by 113%.
So when the company was reporting 100-100% growth in its profit, at that time if you looked at the DI interest in the company, you would see a tremendous increase. But what has happened now is that you have seen the stakes of DIS increasing. But earlier the public stakes were seen going down. But right now we’ve got to see public sticks growing. That means there is a big question mark as to whether big institutions and big fund houses also feel whether the company’s numbers will slow down in the future or not. This will become exactly clear to us only from the company’s commentary and the company’s numbers. Because we have seen the reaction of institutions and fund houses but it is important to see the numbers of the company. So when we get to see the quarter one results of this company, then now keep in mind how we get to see the results of the company.
BEML: Stock Split on the Cards:-
The next company is BEML.The company has informed that it has scheduled a board meeting on July 21. Now in that board meeting, the company will consider the stock split and if the stock split proposal is approved by the company’s board, then you will see this company making the split announcement. Now what does this company do brother? So, we can say that it is a manufacturer of heavy equipment which is also used in the railway sector and we can also say that this company manufactures heavy equipment for the defense sector, so this company has presence in both railway and defense. So if you are an investor in this company then you can take note of this news. Investors cannot ignore this. This is not a recommendation of any kind.
Mazagon Dock Shipbuilders: Riding the Defense Wave:-
The next company name is Magon Dock sh Builders led. Now you all know friends, Mebon is a defense sector company. And when we talk about India’s defense, mainly three names come to our mind. One is Indian Army, second is Indian Air Force and third is Indian Navy. Now the complete contribution of Mesgon goes to the Indian Navy only. And after the Operation Sindoor that we have seen at the present time, India will try to strengthen its defense and will try to buy back a lot of the defense equipment that was used in that war. You can call it buyback or you can also say that you will see it being brought back. Ok? So, big contracts can be seen being issued for this.
Emergency Defense Orders Worth ₹40,000 Crores:-
And at the moment, we are getting to hear one news. The news here at the moment is that fast track procurement worth around Rs 400 billion has been approved by the government. Now let us see what 400 billion means? 400 million. Now, this total number of Rs 400 crores is for those who want to get it quickly. Meaning, whatever equipment was used in the war has to be brought back quickly and placed in the same condition as before and a lot of new additions will also be seen being made by the government there. Now, friends, let us see the exact details and what all things we are getting to hear, currently you can see that the number of around 400 billion dollars that told you is an emergency procurement. Ok? That is, you will find it inside the EP contract. After that, you are getting to see only EP under 13 contracts from the Ministry of Defence. Whose total worth is seen to be around 20 billion. That means we can say approximately around ₹100 crores. And apart from that, you get to see around ₹150 billion i.e. ₹15000 crores, the news of which you had already heard. So overall, the government seems to be investing quite aggressively in the defense sector.
High Valuations – Is It Justified?:-
So, we can somewhere expect that our defence company, whether we talk about BDL, Bharat Electronics, HL, MSON or Cochin Shipyard, all these companies may be seen getting big contracts in the coming times. And friends, if we talk about India’s defense spending right now, then it will not be surprising at all if we cross Germany in the budget of the financial year 2027, then do not be surprised at all because right now we are not very far behind Germany. We are a little behind and currently we invest 2.3% of our GDP in the defence sector. There is that this number can go up to 2.5% and in the future it can go up to 4%. If this happens then no doubt we can cross Germany easily. And if we look at the Make in India or Atmanirbhar Bharat that is being promoted, you may see defence spending in India crossing $100 billion in the coming future.
It means that there are high chances of big automakers emerging in the near future for defence companies. About the valuations of Mesgon, then if we look at the earnings that the company had reported in the past, then we can say that the current valuation of the company is quite expensive, but still if it is sustaining, then it means that the war-like news that you heard, the order-related news that you heard, the things related to defense approval, all those things are somewhere priced in in the valuation of Mesgon. Now this means that from here, if Masgon has to take its valuations further up, then there are basically two reasons it can do so. Firstly due to fast execution and secondly if the company reports its weak earnings, in that case the valuations of the company may go up. But it will be a little difficult to sustain that valuation again. Because of this, right now the company’s earnings will matter more than its orders. Because if the earnings are able to justify the valuation of the company, then the news of the order will ultimately be considered more impressive news.
KPI GN Energy:-
About the next company whose name is KPI gn Energy. About KPI Green, recently a good move was seen in this company because approval was received from the Ministry of Corporate Affairs for SPV i.e. Special Purpose Vehicles. Now what is his name brother? It has to generate, develop, transform, distribute, transmit, sell, supply, all these things, this subsidiary is going to work for them under SPV, we can say so, so all these things are important if we see from the business purpose, so now after all these things, friends, if we talk about the balance sheet of this company. So currently, you can see the company’s reserves going up quite aggressively every financial year, which you can see clearly. But we see the same thing in the company’s department also. The company’s debt in 2022 was around Rs 450 crore. Currently it is approximately Rs 1450 crores. That means, in the last 3 years, you have seen the company’s debt debt increasing by Rs 1000 crores. And if about long term borrowings of the company, then we are seeing it at Rs 864 crores. If we look at it from the previous financial year, you can see it more than double. And if we about the short term borrowings of the company, then the company has reduced it. But ultimately after all these things,about the debt payment history of the company in the financing activities of the company, then the company did not make any debt payment in 24 and 30. It was done for Rs 151 crore in 25. So one thing to note is that in comparison to the amount of debt the company is taking, we do not see the company being that aggressive in debt repayment. So because of all these things, ultimately you will see the company’s dept continuously increasing. So as a KPI a green investor should take into account in the balance sheet of the company.