Shares of Skipper Limited saw a notable increase, climbing 4.2% to ₹462.70 in early trading on the Bombay Stock Exchange (BSE). This rise follows a buy call from Nuvama Institutional Equities, which assigned the stock a price target of ₹650 per share. This figure represents a 46.39% upside compared to the previous closing price of ₹444. Skipper's market capitalisation rose to ₹5,084 crores, contributing to a turnover of ₹18.75 crores.
For investors looking to buy shares online, Skipper Ltd has shown strong performance, gaining 98.41% in 2024 alone and a total of 110% in the past year. The stock has surged by 532% over two years and 450% over three years, reflecting significant growth over the period. The company's shares are trading above the 20-day, 30-day, 50-day, 100-day, and 200-day moving averages but remain below the 5-day and 10-day moving averages.
Technical analysis of Skipper's stock performance
Skipper Ltd has demonstrated considerable growth in its stock value. In terms of technicals, the stock's relative strength index (RSI) is at 49.4, indicating that the stock is neither overbought nor oversold. Additionally, Skipper has a beta of 1.6, meaning it has experienced high volatility over the past year. Investors keen on buying shares online may note the stock's movement trends and overall performance before making decisions.
Nuvama's buy call on Skipper is backed by several positive factors, including the company's position to benefit from upcoming tailwinds in power transmission and distribution (T&D) capital expenditure. India is expected to invest ₹9.2 trillion in this area from 2022 to 2032. Skipper is also focusing on improving its product mix, shifting to the high-voltage (HV) segment, which is more profitable. Moreover, the firm plans to double its capacity over the next four to five years, further bolstering its position in the industry.
Nuvama's valuation and potential for growth
Nuvama has valued Skipper at 25 times its estimated FY27 earnings per share (EPS) of ₹26, which translates to the target price of ₹650. In their bull case scenario, the price target could rise to ₹740, assuming the company achieves an 11% operating margin by FY27. For investors looking to buy shares online, these projections represent a significant potential upside.
Nuvama's analysis also highlights Skipper's improving financial health, including its well-capitalised balance sheet, which currently has a debt-to-equity ratio of 0.49x. The company's operating profit margins are expected to increase from 9.7% in FY24 to 10.5% by FY27, according to the guidance provided by Skipper's management. However, key risks include possible execution delays, fluctuations in raw material prices, and working capital management challenges.
Axis Securities' take on Skipper Ltd
Axis Securities has also placed a buy call on Skipper, assigning a target price of ₹600 per share. Axis Securities pointed out that Skipper is India's largest and the world's only integrated transmission and distribution (T&D) company. It holds a 10%-15% market share in the high-voltage transmission lines sector, positioning it to take advantage of rising demand for T&D infrastructure as India's power needs grow.
The brokerage also highlighted Skipper's presence in other segments, including the polymer sector, where it manufactures pipes and fittings. Skipper's polymer division has a capacity of 62,000 MTPA, while the company also produces telecom towers and railway structures. Axis Securities' analysis suggests that the company's diverse operations make it a strong candidate for investors seeking to buy shares online.
Final thoughts
Skipper Ltd's recent performance and buy calls from leading brokerages like Nuvama Institutional Equities and Axis Securities highlight the stock's potential for growth. With strong fundamentals, a well-defined expansion plan, and a strategic position in key sectors like power transmission and distribution, Skipper is poised to capitalise on future opportunities.
Investors interested in buying shares online should monitor Skipper's stock closely as it continues to grow in the competitive market.
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