Shares of RMC Switchgears were locked in a 5% high at Rs 264.25, which was also an all-time high at 10:05 am BSE on Friday. Shares of the electrical equipment company were frozen upstream for the 41st straight session. The stock has surged 500% from the Rs 44 level in the past two months, BSE data shows.

RMC Switchgears manufactures LT/HT distribution boxes and panels, junction boxes, feeder posts, other distribution, circuit protection switchgear, PVC designer UV panels and acrylic solid surface products.

RMC Switchgears deals in the SME sector under the ‘MT’ group of the BSE. BSE SME shares are listed under the ‘M’ group (traded, cleared and settled on a net basis) and the ‘MT’ group (traded, cleared and settled on a gross basis).

RMC mainly bids for various government DISCOMs. RMC’s backlog of around Rs 112.96 crore as of May 31 2022, is about 2.72x FY22, providing strong revenue visibility. In addition, the company has secured an order of Rs 236 crore from Maharashtra State Electricity Distribution Co Ltd and is declared L1. Pending orders are expected to be filled in the next one to two years, suggesting that short- to medium-term revenue visibility is feasible.

In the first half (April-September) of the current fiscal year 2022-23 (H1FY23), RMC reported a profit after tax of Rs 6.14 crore compared to Rs 0.47 crore in H1FY22. Operating income for the period rose 224% year-on-year to Rs 58.03 crore compared to Rs 17.90 crore a year earlier.

On October 21, RMC said the company’s credit rating had been upgraded to IVR BB-/Stable, based on an Infomerics Valuation and Rating Private Limited rating assessment.

The ratings assigned to RMC Switchgears’ banking facilities benefit from the company’s long track record of operations under the leadership of experienced promoters, satisfactory order status indicating revenue visibility and a well-known customer base.

In addition, the rating notes the company’s improved scale of operations in FY22 and the first quarter of fiscal 2023, coupled with a satisfactory capital structure and moderate debt protection metrics. In addition, the rating agency said the company plans to issue new shares through a rights issue, which will further strengthen the company’s net asset position in the short term.

It added that these rating strengths were partially offset by its small operations, past delay events, the tender-driven nature and customer concentration of the business, and the highly working capital-intensive nature of its operations.
As of September 30, 2022, RMC’s outstanding share capital was 6.09 million shares. The promoter holds 55.6% of the company’s shares. The shareholding pattern data shows that the remaining 44.4% of the shares are held by individual shareholders (31.02%), corporate bodies (7.83%) and others (4.66%).