Skipper Shares Soar 10% After Nuvama Gives ‘Buy’ Rating, Predicts 46% Upside

Skipper’s share price jumped nearly 10% on Tuesday after Nuvama Institutional Equities began covering the stock with a positive outlook. The shares increased by 9.62% to ₹486.75 each on the BSE.

Nuvama gave Skipper a ‘Buy’ rating and set a target price of ₹650 per share for the next 12 months, suggesting a potential upside of over 46% from Monday’s closing price. In an optimistic scenario, they have a target of ₹740.

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With a strong presence in the Transmission and Distribution (T&D) sector, Nuvama believes Skipper Ltd is well-positioned for success, driven by the proposed National Electricity Policy (NEP) that includes a ₹9.2 lakh crore investment in transmission from FY22 to FY32. Additionally, a global shift towards renewable energy is expected to boost high-voltage T&D investments.

Skipper stands to gain significantly from both domestic and export orders. The company is unique because it integrates rolling mills, produces tower pole fasteners, and has engineering, procurement, and construction (EPC) capabilities. It plans to double its tower manufacturing capacity from 300,000 MTPA to 600,000 MTPA with an investment of ₹800 crore over the next four to five years.

In international markets, Skipper faces less competition from Chinese and Turkish firms, leading to a 64% growth in its international pipeline for FY24, reaching ₹108.3 billion.

Nuvama highlighted several factors that will help Skipper grow:

1. A projected power T&D investment of ₹9.2 trillion from 2022 to 2032.
2. A better product mix focusing on higher-margin high-voltage segments.
3. Doubling of manufacturing capacity in the next four to five years.
4. A solid balance sheet, with a debt-to-equity ratio of 0.49 and an expected increase in operating profit margin from 9.7% in FY24 to 10.5% by FY27.

Skipper’s stock has performed impressively this year, providing multibagger returns. The shares have risen over 15% in one month and more than 23% in three months. Year-to-date, the price has doubled, giving around 110% returns, and it has increased by 116% over the past year.

As of 11:10 am, Skipper’s shares were trading 8.81% higher at ₹483.10, with a market capitalization of ₹crore on the BSE.