Surat Gujarat : Top 5 Microcap Nuclear Power Stocks
With a contribution of around 3% to India’s overall power output, nuclear energy ranks as the country’s fifth-largest electrical source. India now has a nuclear power generation capacity of 7,480 megawatts (MW), but in order to reach its net-zero objectives by 2031, the government intends to increase by four that capacity to 22,480 MW.
It is already in discussions with certain significant companies in the power industry and is accepting private investments up to Rs 2.16 trillion. Businesses that supply the nuclear energy sector will profit from the industry’s projected growth.
This article contains our pick of five microcap companies that provide EPC projects or supply the nuclear power industry.
1 Patel Airtemp
The manufacturer produces a wide variety of compressors, separators, condensers, and heat exchangers. For its customers, it also handles complete air conditioning, ventilation, and heating projects. The firm provides services to several sectors, including as oil and gas, petroleum products, thermal power, nuclear power, chemicals and fertilisers, via its diverse range of products. Following the receipt of the N-Stamp authorization to manufacture pressure vessels and exchangers for nuclear facilities, the firm began serving the nuclear power industry in 2017. The third Indian organization to get this kind of authorization was Patels Airtemp.
Due to strong quantities, the company’s revenue has increased at a CAGR of 13.3% since that time. Moreover, the net profit increased at a CAGR of 8.9%. Products from Patel Airtemp are essential parts of nuclear reactors and power plants, assisting in the transmission of heat from one medium to another without combining the two. This aided the business in obtaining valuable orders. The firm has orders of Rs 44.2 billion as of October 2023. The firm can meet the orders and provide revenue visibility in the medium term since it just invested in a greenfield project to increase its production capacity.
Patel Airtemp (2018-2023)
| 2018-2019 | 2019-2020 | 2020-2021 | 2021-2022 | 2022-2023 | |
| Revenue (Rs m) | 1,517 | 2,393 | 2,560 | 3,043 | 2,828 |
| Revenue Growth (%) | 57.7% | 7.0% | 18.9% | -7.1% | |
| Net Profit (Rs m) | 73 | 113 | 114 | 124 | 112 |
| Net Profit Margin (%) | 4.8% | 4.8% | 4.4% | 4.1% | 4.0% |
| Return on Equity (RoE) | 9.2% | 12.6% | 11.4% | 11.2% | 8.6% |
| Return on Capital Employed (RoCE) | 17.3% | 21.4% | 20.5% | 18.5% | 18.4% |
2 Konstelec Engineers
The business provides EPC services both domestically and internationally. It has completed more than 250 projects of all sizes and levels of difficulty for a range of sectors, including ports, steel, cement, oil and gas, electricity, pharmaceuticals, and substations. The business has worked on a number of nuclear power-related projects. It has completed main plant electrical balancing and control and instrumentation work for KAPP at the Nuclear Power Corporation of India.
Additionally, it provided NFC Kota at the Nuclear Fuel Complex with area illumination and construction power supplies. Bhabha atomic research center, Nuclear Power Corporation of India, NTPC, Adani Power, Tata Power Solar, and NALCO are a few of its customers. The business has 50 orders from different industries for Rs 5.6 billion as of August 2023. Due to quicker execution, Konstelec Engineers’ revenue has increased at a CAGR of 13% over the last five years. Over the same time period, the net profit increased at a CAGR of 10.2% as well. The company’s revenue and profit are expected to increase in the medium term due to its broad experience providing EPC services and its substantial order book.
Konstelec Engineers Financials (2018-2023)
| 2018-2019 | 2019-2020 | 2020-2021 | 2021-2022 | 2022-2023 | |
| Revenue (Rs m) | 841 | 1,148 | 1,020 | 1,090 | 1,550 |
| Revenue Growth (%) | 36.5% | -11.1% | 6.9% | 42.2% | |
| Net Profit (Rs m) | 48 | 55 | 24 | 35 | 78 |
| Net Profit Margin (%) | 5.8% | 4.8% | 2.4% | 3.3% | 5.1% |
| Return on Equity (RoE) | 11.7% | 11.1% | 4.7% | 6.5% | 12.6% |
| Return on Capital Employed (RoCE) | 22.2% | 22.1% | 13.1% | 14.2% | 23.6% |
3 AMIC Forging Financials
The company’s installed capacity is 12,600 metric tons (MT), and its capacity utilization is 85%. It caters to many sectors such as thermal power, nuclear power, oil and gas, steel, heavy engineering, and refineries. It wants to establish a new factory for casting high-quality created alloys in an induction stove and plans to pursue backward integration. This will assist the business in reducing expenses while maintaining the standard of its output.
Its income has increased at a compound annual growth rate (CAGR) of 64.3% over the last three years due to strong volume growth. Over the same time period, the net profit increased at a CAGR of 153.7% as well. In the future, AMIC Forging’s revenue and net profit growth are anticipated to be driven by rising capital expenditures across customer sectors.
AMIC Forging Financials (2020-2023)
| 2020-2021 | 2021-2022 | 2022-2023 | |
| Revenue (Rs m) | 264 | 714 | 1,168 |
| Revenue Growth (%) | 170.5% | 63.6% | |
| Net Profit (Rs m) | 6 | 9 | 98 |
| Net Profit Margin (%) | 2.1% | 1.2% | 8.5% |
| Return on Equity (RoE) | 8.3% | 11.3% | 49.4% |
| Return on Capital Employed (RoCE) | 10.1% | 10.8% | 57.9% |
4 DP Wires Financials
Plastic film sheets and steel wires are produced by the firm. In addition, it trades plastic goods and uses windmills to produce power. Products from the corporation are used in many different sectors, including construction, oil and power, automobiles, and infrastructure projects including railroads, dams, bridges, and nuclear power plants. With a production capacity of 80,000 tons annually, the company has a robust distribution network spanning eight cities, serving over 100 customers.
The business has a long-standing relationship with each of its customers, including the National Highways Authority of India, NTPC, Nuclear Power Corporation of India, L&T, and other city metro project companies. Strong growth in every category has contributed to the company’s revenue growth over the previous five years, which has increased at a CAGR of 29.6%. Over the same time period, the net profit increased at a CAGR of 18.7% as well. To meet the increasing demand for its goods, it is now expanding the capacity of its current production plant. In order to increase revenue and profitability in the medium term, the firm is going to focus on improving capacity utilization, venturing into new markets, and investigating new geographical areas.
DP Wires Financials (2018-2023)
| 2018-2019 | 2019-2020 | 2020-2021 | 2021-2022 | 2022-2023 | |
| Revenue (Rs m) | 3,341 | 2,861 | 4,692 | 6,160 | 12,213 |
| Revenue Growth (%) | -14.4% | 64.0% | 31.3% | 98.3% | |
| Net Profit (Rs m) | 174 | 167 | 241 | 291 | 410 |
| Net Profit Margin (%) | 5.3% | 5.9% | 5.2% | 4.7% | 3.4% |
| Return on Equity (RoE) | 21.2% | 16.9% | 19.6% | 19.1% | 21.4% |
| Return on Capital Employed (RoCE) | 31.5% | 23.4% | 26.7% | 26.6% | 29.8% |
5 Kirloskar Electric Company
The company manufactures AC motors, DC motors, transformers, switchgear, and electronics to serve various industries such as power generation, transmission & distribution, transportation, renewable energy, sugar, steel, and cement. It also caters to clients in the defense and nuclear power sectors. Some of its clients include Jindal Group, Aditya Birla Group, BHEL, NTPC, HPCL, and Nuclear Power Corporation of India.
Due to strong volume, the company’s revenue has increased at a compound annual growth rate (CAGR) of 6.7% during the previous five years. In addition, the business started to earn a profit, reporting a Rs 311 million (m) gain relative to a Rs 279 million deficit five years before. In the future, user industries’ demand for its goods is anticipated to be driven by the growing need for electricity.
Kirloskar Electric Company Financials (2018-2023)
| 2018-2019 | 2019-2020 | 2020-2021 | 2021-2022 | 2022-2023 | |
| Revenue (Rs m) | 3,622 | 4,037 | 2,854 | 4,537 | 5,019 |
| Revenue Growth (%) | 11.5% | -29.3% | 59.0% | 10.6% | |
| Net Profit (Rs m) | -279 | 453 | -481 | 674 | 311 |
| Net Profit Margin (%) | -9.5% | 14.4% | -17.3% | 20.1% | 6.6% |
| Return on Equity (RoE) | 30.5% | -95.6% | -143.6% | 88.7% | 33.8% |
| Return on Capital Employed (RoCE) | -107.6% | -3424.9% | -31.8% | 129.1% | 58.3% |
Conclusion
Within the rapidly expanding nuclear energy industry, the top five microcap nuclear power companies to watch in 2024 provide attractive investment potential. These businesses hope to gain from rising demand for nuclear technology and infrastructure as governments across the globe place a premium on clean energy and invest substantial resources to nuclear power.
These companies give a variety of exposure to the nuclear energy value chain, ranging from Patels Airtemp and Konstelec Engineers, who specialize in designing solutions for nuclear power plants, to AMIC Forging and DP Wires, which offer necessary components for nuclear reactors. Furthermore, Kirloskar is in a strong position to use its knowledge of the nuclear power industry to support long-term development because to its diverse business portfolio.
For investors looking to capitalize on the bright future of nuclear energy, careful study and well-considered investment choices might result in substantial returns, even if microcap stock trading has inherent risks. To maximize the growth potential offered by these microcap nuclear power companies and make well-informed investment choices, investors should closely watch market dynamics, business performance, and industry trends. keep stay with us on finance navigatorr telegram.