Skipper Limited has three broad segments namely manufacturing for transmission and distribution structures consisting of power transmission towers, power distribution poles and telecom towers, among others. It also has a small, but growing brand in polymer sector which includes UPVC pipes, CPVC pipes and HDPE pipes. The smallest part of its business is infrastructure projects which includes transmission line EPC, telecom EPC, railway electrification and water EPC.

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The quarterly performance of the company has been improving and they reported their best-ever quarterly revenues in the fourth quarter of FY23, as revenues topped Rs 650 crore with both engineering and polymer products growing in excess of 20 percent and margin showing an improving trend every quarter in FY23.

Over the past few years though, growth hasn't been great. However, the management has indicated that they now intend to grow by 25-30 percent for the next three years.

Vertical-wise, the engineering products business is the largest revenue contributor with the best margin at 12.8 percent. The management said there is scope for overall margin to get better on back of better quality contracts and increased share of engineering export business. This will be further aided by the polymer segment as it attains scale and size and which will be benefited from fixed cost getting rationalised over a larger revenue base. The management added that they are positioned to grow exports from existing 50 percent of engineering revenue in FY23 to 75 percent in the next couple of years.

The year-end closing order book was at Rs 4,551 crore which is the highest ever in its history. Of which, exports accounted for 20 percent and the share of non-transmission and distribution products, including railways and telecom, increased to 62 percent, but this is higher as they secured their largest single order win of around Rs 2,570 crore from BSNL during FY23.

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Additionally the company is actively pursuing projects worth Rs 6,600 crore on the international front and about Rs 3,520 crore domestically. In the past month, the company won fresh orders worth Rs 1,135 crore from the domestic and international markets.

In FY23 the company made the right moves on the balancesheet-front as the total debt reduced on account of better working capital utilisation and better collection from debtors.

With regards to shareholding pattern, the promoter entity holds around 72 percent stake, while FII ownership is around 9.5 percent.

If we annualise its healthy Q4FY23 numbers, it is trading at 17x so the company will have to deliver something phenomenal from here on to justify the recent run up.

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First Published:Jul 4, 2023 11:05 AM IST