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| Image Credit: BPL |
For the eleventh trading day in a row, shares of consumer electronics manufacturer BPL were stuck in the upper circuit, up 5% at Rs 60.75 on the BSE on Thursday. After rallying 86 per cent in the last two weeks, the stock is now trading at its 52-week high. The S&P BSE Sensex, on the other hand, was down 0.02 per cent at 58,237 points at 12:10 p.m.
Data shows that over 90,000 equities shares have changed hands on the counter, with 534,599 pending buy orders on the NSE and BSE. BPL is currently traded on the BSE under the T group. Each trade in the T2T segment must result in delivery, and no intra-day netting of positions is permitted.
The electronic industry, according to BPL, is primed for better growth, bolstered by the government's 'Make in India' plans. Printed Circuit Boards (PCBs) are currently imported by approximately 85%, so this is one of the components that is being actively studied for import substitution. This is significant potential, and electronic manufacturing companies have taken advantage of the government's Production Linked Incentives (PLI) programmes to grow their capabilities and capacities, according to the corporation.
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"Over the last few months, the quantity and quality of new business possibilities have increased dramatically. The company has taken the necessary efforts to strengthen its PCB portfolio by working on new products such as RF PCBs. The PCB Division's new products offer a profitable new direction for the company "BPL stated in its annual report for the fiscal year 2020-21 (FY21).
Brickwork Ratings (BWR) reaffirmed BPL's bank lending facilities ratings in July 2021. According to the agency's rating rationale, the company and its promoters have a three-decade track record and extensive experience in the PCB and consumer durables industries, which has aided them in understanding business cycles, establishing relationships with suppliers and customers, obtaining repeat orders, and addressing associated inherent risks.
During FY20, the company recruited new customers such as Havells and Crompton Greaves, which are expected to support the anticipated increased revenues from PCB manufacturing. PCB sales accounted for roughly 22% of the company's revenue in FY20, rising to around 69 per cent in FY21.
Over the longer term, BWR believes BPL's business risk profile will be maintained. It added that the outlook could be changed to ‘Negative' if the company reports significantly lower-than-expected results, resulting in further deterioration of coverage indicators, delays in recovering advances from related parties, further delays in redemption of the Rs 54 crore preference shares, and a weakening of liquidity position.
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