GMR Power shares jump 20% today to hit upper circuit; here's why

Shares of GMR Power and Urban Infra Ltd rose sharply in Friday's trade amid heavy volumes. The stock jumped 20 per cent to hit the upper price band of Rs 24.14 today. Although, the counter erased halved of its gains and was last seen trading 9.10 per cent higher at Rs 21.95. Around 43.23 lakh shares changed hands today on BSE, which was way more than the two-week average volume of 1.83 lakh shares. Turnover on the counter stood at Rs 10.09 crore, commanding a market capitalisation (m-cap) of Rs 1,324.89 crore.

The sharp upward move in the stock price came after the company's subsidiary bagged an order to implement a smart metering project. "We wish to inform you that GMR Smart Electricity Distribution Pvt Ltd (GSEDPL), a stepdown subsidiary of GMR Power, has received Letter of Intent (LOI) from Purvanchal Vidyut Vitran Nigam Ltd and Dakshinanchal Vidyut Vitran Nigam Ltd, to implement smart metering project in the Purvanchal (Varanasi, Azamgarh zone and Prayagraj, Mirzapur zone) and Dakshinanchal (Agra and Aligarh zone) area of Uttar Pradesh. GSEDPL will install, integrate and maintain 75.69 lakh smart meters in the given area," GMR Power stated in an exchange filing.

"The LOI has been issued in conclusion to the e-tender floated by UP Discoms for different areas of Uttar Pradesh. GSEDPL participated in the e-tender and emerged as a winner. The project will be spanned over a period of 10 years," it added.

The company mentioned that the Advanced Metering Infrastructure (AMI) Project would include supply, installation, integration, commissioning, operation and maintenance of smart meters on DBFOOT basis backed by state-of-the-art technology and software solutions for end-to-end automated system management.

"The project will be executed under Revamped Distribution Sector Scheme (RDSS) and is expected to reduce the AT&C losses in the designated area and improve operational and collection efficiency of UP Discoms," it further stated.

The counter's 14-day relative strength index (RSI) came at 61.90. A level below 30 is defined as oversold while a value above 70 is considered overbought. The company's stock has a negative price-to-earnings (P/E) ratio of 5.11. It has a price-to-book (P/B) value of 1.40. The scrip has a one-year beta of 0.88, indicating low volatility.

GMR Power, subsidiary of GEPL, is engaged in energy, urban infrastructure and transportation businesses. GMR energy sector has an installed capacity of over 3000 MW and has a balanced fuel mix of coal, gas, LSHS as well as renewable sources of wind and solar energy.

Meanwhile, Indian equity benchmarks trade higher today's deals, led by gains in technology, FMCG, metals, pharma and energy stocks.

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