Power & Instrumental (Gujarat) Limited engages in electrical contract work business and deals in electrical equipment in India. The company provides contracting based, industrial electrical, and power backup and standby services; and services for electrical and commercial electrical contractors. It also offers design, installation, maintenance, and repair services for energy efficient power and distribution transformers, generators, compressors, load banks, and others. Power & Instrumental (Gujarat) Limited was founded in 1975 and is based in Ahmedabad, India.

India

Power & Instrumental (Gujarat) Limited

Industrials

The company pays dividends irregularly. There have only been a few years with dividend payments in the past ten years. Dividend per share (DPS) has grown yearly, but the dynamics are somewhat mixed. In the past 12 months, the dividend yield has barely been above zero and was substantially below that of its peers. 

PIGL.NS reported revenue of INR 1 530mn in the last 12 months, up 44% from FY23. At the same time, the dynamics of cash flow, as measured by free cash flow (FCF), were drastically different. EPS grew 135% from FY23 to INR 8.26.

Over the last six months, the stock performance has varied, with an increase following a drop. The stock's price trend wasn't definitive when matched against its global counterparts from the same sector and industry (as depicted above). Within the past six months, its performance has trailed this peer group's by 26ppts and its growth decelerated by 1ppts in the past month. This is equally valid for peers from the same country and industry. Given the stock's valuation versus its peers, its total price movement is neither favourable nor unfavourable.

The company has reported modest EBITDA margins compared to its global peers in recent years. EBITDA margin amounted to 11.9% in the last 12 months, up from 9.9% in FY23. 

Historically, PIGL.NS has reported modest net margins compared to its global peers. Specifically, in the last 12 months, this metric equalled 7.6%, a growth from 5.4% in FY23. 

Another important profitability metric, return on assets (RoA), amounted to 8.9% in the last 12 months, an increase from 5.5% in FY23. 

In the last 12 months, the return on capital employed (RoCE) grew to 14.6%, above the peers. 

Power & Instrumental (Gujarat) Limited reported a return on equity (RoE) of 15.7% in the last 12 months, up from 12.3% in FY23. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been 1.4 in the past several years. This ratio implies a average shareholder value creation. 

The institutional, legal, and compliance risks associated with the company's country are close to minimal. In combination with rigorous business standards, shareholder rights are well protected.

PIGL.NS has very poor trading liquidity. It will take considerable time for the average private investor to sell a common position under normal market conditions. Liquidity is unstable and becomes extremely unfavourable on the days with the lowest activity. The trading volume mostly stays the same even under highly turbulent market conditions. Another factor to consider is the substantial number of days with zero trading volumes, i.e., without any ability to sell a position. The stock has a tiny market capitalisation, which usually makes its trading liquidity erratic and unpredictable. 

No other major risks have been identified.

The risk of default is moderate. We note resilient historical revenue growth and an favourable capital structure, among the positive credit factors. Among the negative credit factors and we point to weak positions in its industry, poor working capital management.

In highly turbulent market conditions, PIGL.NS is as volatile as an index. In other words, the stock will move with the index in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be limited. 

In normal market circumstances, PIGL.NS is highly volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will change somewhat erratically. The stock's losses on its worst days (less than 1-5% of the time) will range from limited to average. 

Considering past and projected metrics, the stock is moderately 'expensive' compared to its peers. In particular, the stock is reasonably priced on P/E, of fair value on EV/EBITDA, overvalued on P/FCF. 

Power & Instrumental (Gujarat) Limited

₹ 166.1

3

Power & Instrumental (Gujarat) Limited

₹ 166.1

3

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

₹ 166.1

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