The shares of this Defence stock engaged in the manufacturing of industrial explosives and detonators are in focus after the company expects revenue of Rs. 10,000 crores by 2030.
Share Price Movement
The share price of Premier Explosives Ltd went up by 3 percent in the day’s trade after the company expected revenue of Rs. 10,000 crore. It touched a day’s high of Rs.437.80 per share on Thursday. The stock delivered a return of 63 percent return in the past year and outperformed the nifty index in the same period. However, the shares have adjusted and were trading at Rs. 431 which is 1.57 percent higher than the previous closing price of Rs. 424.35.
What Happened
Managing Director of Premier Explosives Chowdary said that they announced ambitious growth targets for Premier Explosives, which aims to achieve a turnover of Rs 5,500 crore by the end of 2025 and Rs 10,000 crore by 2030. Despite a 24 percent year-on-year decline in EBITDA to Rs 16.6 crore due to delivery delays, Chowdary remains optimistic about future profits as completed stocks are set for dispatch in the upcoming quarter.
The company’s order book reached Rs 827 crore which is three times its FY24 revenue, with most contracts expected to be fulfilled within 18 months. Chowdary confirmed that Premier Explosives will maintain its presence in the industrial explosives sector, focusing on profitability over reducing dependence on defence orders.
The guidance posted a significant increase in net profits and a jump in revenue in Q2FY25.
Financials
According to its recent filing, In Q2FY25, Premier Explosives Ltd reported a 20.63 percent increase in revenue to Rs.94.60 crore in Q2FY25, compared to Rs.78.42 crore in Q2FY24. Furthermore, quarterly, the company saw an increase of 14.16 percent in revenue from Rs.82.86 crore in Q1FY25.
In the same period, the company reported an increase in net profits to Rs.94.60 crore in Q2FY25, compared to Rs.78.42 crore in Q2FY24, and on a quarter-on-quarter basis there was a percent increase from Rs. in Q1FY25.
The company has a current ratio of 1.15, a debt-to-equity ratio of 0.35, a return on equity stood at 13.70 percent, and a return on capital employed was 17.74 percent.
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Revenue Mix
The company recognises their revenue from High Energy Materials which they consider as the sole segment as of Q2 September 2024.
Shareholding Pattern
As of September 2024, the shareholding pattern includes promoters holding a share of 41.33 percent stake in Premier Explosives, Foreign Institutional Investors (FII) holding around 0.36 percent, Domestic Institutional investors (DII) standing at 8.36 percent, and public holdings standing at 49.95 percent.
About the company
Premier Explosives Limited, founded in 1980, specializes in the manufacture of high-energy materials for defence, mining, space, and infrastructure sectors. The company produces a wide range of products, including solid propellants for missiles, bulk explosives, detonators, and various blasting accessories.
Premier is recognized for its indigenous technology and innovation in explosives manufacturing. Their business model focuses on both B2B sales and government contracts, with a significant order book that ensures revenue visibility. The company operates multiple manufacturing units across India and emphasizes quality and safety in its operations.
Written by – Santhosh S
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