Sanghvi Movers at new high

Sanghvi Movers is currently the top gainer on the BSE; the stock opened 4% higher ay Rs.1178 and went on to hit a new high at Rs.1247, up 10%.

The stock is being accumulated by discerning investors on the back of its strong fundamentals. The stock was first recommended by us in Aug’23 at Rs.651 and then consistently since 8th Feb at Rs.1021.

As explained in our Little Gems section, the company reported fantastic Q3 earnings, with fleet utilisation improving to 87% in Q3FY24, from 82% YoY resulting in revenue up 19% QoQ and 36% YoY to Rs. 167 cr, and PAT up 65% QoQ and 76% YoY to Rs. 61 cr.

Average gross yield per month improved to 2.19% in 9MFY24, from 1.92% in 9MFY23.

EPS for Q3FY24 stood at Rs. 14 and 9MFY24 at Rs. 32, surpassing FY23’s EPS of Rs. 26. Unexecuted order book of Rs. 151 cr is expected to be completed in Q4FY24, against revenue of Rs. 127 cr for Q4FY23.

Net debt stands at Rs. 293 cr (0.3x debt equity ratio).

The company is India’s largest and world’s 6th largest Crane Rental Company, commanding 40-45% domestic market share, with 60-65% allocation in high-end crane market of >400 MT.

Our analysis estimates a PE multiple at 22.5x, based on FY25E EPS of Rs. 52. With 49% of company revenue from wind energy and being a direct beneficiary of domestic infrastructure push, company has a lot of growth visibility.

Our call on 23rd Feb -  Share ruling at Rs. 1,171 can move to Rs. 1,206 in 1 month and Rs. 1,241 in the next 3 months.