Shares of Skipper Ltd crossed the Rs 600 mark for the first time ever on Monday after brokerage ICICI Securities initiated coverage with a buy call on the multibagger stock. The stock climbed 12.81% to a record high of Rs 619.20 on BSE. Total 2.03 lakh shares changed hands amounting to a turnover of Rs 12.06 crore on BSE. Market cap of the firm rose to Rs 6663.68 crore. The stock fell to a 52-week low of Rs 197.35 on October 25, 2023. Skipper stock has gained 155% in 2024 and risen 166% in a year. It zoomed 743% in two years and rose 1138% in five years.
In terms of technicals, the relative strength index (RSI) of Skipper stands at 70.4, signaling it has entered the overbought territory. The stock has a beta of 1.7, indicating very high volatility in a year. Skipper shares are trading higher than the 5 day, 10 day, 20 day, 30 day, 50 day, 100 day and 200 day moving averages.
ICICI Securities has assigned a price target of Rs 635 to the stock.
"The company’s orderbook of Rs 58.4 bn (1.8x FY24 revenue) and strong bidding pipeline provide visibility for 2 years. We are building in revenue/EPS CAGR of 25%/56% over FY24-27E and initiate coverage with BUY, TP of Rs 635 based on 27x H1FY27. The target valuation is below 1 sigma above its mean and slightly above its peers given a better margin profile and significant incremental expected growth," said ICICI Securities.
Nuvama Institutional Equities has a 'Buy' call on the stock. It assigned a price target of Rs 650 per share.
"Skipper is ready to harness several tailwinds: i) power T&D capex of INR9.2tn over 2022–32; ii) improving product mix with a shift to margin-accretive HV segment; iii) doubling of capacity in four–five years; iv) a well-capitalised balance sheet with FY24 D/E at 0.49x (exhibit 32); and v) operating profit margins improving from 9.7% in FY24 to 10.5% by FY27E (guidance of 11% for three years). Valuing Skipper at 25x FY27E EPS of Rs 26 yields a target price of Rs 650. Our bull case target price of Rs 740 factors in 11% margin by FY27E with a 30% OI CAGR and a similar target multiple vis-a-vis the base case. Key Risks: Execution and order award delays, sharp price movement of raw material (50% unhedged T&D OB) and WC management," said Nuvama.
Axis Securities is also bullish on the stock. Its price target of Rs 600 was achieved in the current session.
Axis Securities said, "As India's largest and the world's only integrated Transmission & Distribution (T&D) player, Skipper is uniquely positioned to capitalize on the rising demand in the sector."
"The brokerage currently has 10%-15% market share in high-voltage transmission lines. Skipper is also a leading brand in the polymer sector in India (pipes and fittings) with a capacity of 62,000 MTPA. It also manufactures telecom towers and railway structures. The company operates through three segments - Engineering (68% of FY24 Revenue), Infrastructure (18%) and Polymer (14%). National Electricity Plan (NEP) has projected a total Capex of Rs 4.75 trillion crore during the period 2022-27 for laying out an additional transmission system (of 220 kV+) in the country to meet the rising power demand as well as to evacuate power from the growing RE capacity. Skipper is well-positioned to cater to this growing T&D investment. To cater to the soaring T&D infrastructure demand, Skipper targets to double its capacity from the current 3 lakh tonnes to 6 lakh tonnes over the next 4-5 years with a total capex of Rs 800 cr," said the brokerage.
Skipper Limited is one of the leading companies in the power transmission & distribution and the polymer segment. Skipper differentiates its offerings with high quality but cost-effective solution for infrastructure providers and telecom operators. Its international footprint spans across continents such as Latin America, Europe, and Africa and is spread across 40 plus countries with presence across sub-segments such as Power Transmission & Telecom Towers and Poles , EPC, Monopoles, and Railway Electrification Structures.