Shares of Honda Power Products India hit a new high of Rs 2,357.05 in intraday trade on Friday, up 9% on the BSE. In contrast, the S&P BSE Sensex was down 0.26% at 61,588 at 10:13 am.

Shares of the industrial equipment company have rallied 45% over the past month after reporting strong earnings for the quarter that ended September 2022 (Q2FY23), compared with a 4.5% gain in the Sensex index.

In Q2FY23, the company’s profit after tax (PAT) rose 167% year-on-year to Rs 42.42 crore on solid operating income. It had a PAT of Rs 15.9 crore in Q2FY22 compared to Rs 4.91 crore in the preceding quarter (Q1FY23).

Operating income for the quarter rose 70.5% year-on-year and 97% quarter-on-quarter to Rs 394 crore. Ebitda’s margin increased by 564 basis points year-on-year to 14.29%. The Ebitda margin for Q1FY23 was 2.82%.

Honda India Power Products is principally engaged in manufacturing and marketing portable generator sets, water pumps, general-purpose engines, lawnmowers, brush cutters and tillage machines. The company faces domestic and international markets.

State and Union governments continue to allocate and provide support to the agriculture and infrastructure sectors as expected, despite changes in the composition, spending, and attributes of the agriculture and infrastructure sectors.

Agricultural output improvement programs and investments everywhere, led by increased levels of mechanisation and a shift to horticulture and oilseeds, are leading indicators of improved farm incomes. The sector’s return on investment has been encouraging at all levels.

“Construction mechanisation, running applications through portable motors and agricultural machinery products such as motors, water pumps, etc., relying on increasing farmers’ income, the expected continuation of government support, and the high cost and scarcity of labour will provide us with a large-needed demand products and product mix,” management said.

The company seeks to develop a multi-channel structure to support domestic original equipment manufacturers (OEMs) in various fields in developing application-related products and equipment. Management added that partnering with these small, medium and speciality premium manufacturers is expected to create another much-needed ecosystem of cost-competitive and application-specific products and services.