GMR Power jumps 5% on Authum Investment & Infra's 1.2% stake purchase

So far this year, this midcap stock more than doubled or jumped 140 percent

Shares of GMR Power and Urban Infra jumped over 5 percent to Rs 141 on September 3 as Authum Investment & Infrastructure bought 74.9 lakh shares or 1.2 percent stake at Rs 134 apiece a day ago via open market transactions. Additionally, analysts at B&K Securities initiated a 'buy' coverage on GMR Power and Urban Infra, seeing an upside potential of 37 percent from current levels.

The coverage comes as analysts believe that the government's renewed focus on thermal power positions the company favourable for future growth.

So far this year, this midcap stock more than doubled or jumped 140 percent, as against benchmark Nifty 50's 16 percent rise. Earlier, GMR Power shares had hit 52-week high of Rs 140 apiece on August 30, 2024.

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GMR Power holds expertise in the sectors of energy, urban infrastructure, and transportation. The company's segments include power, roads, engineering, procurement, construction, and others. Its energy sector has an installed capacity of over 3,000 megawatts and has a balanced fuel mix of coal, gas, low sulphur heavy stock, as well as renewable sources of wind and energy.

B&K Securities pointed out that GMR Power is broadening its portfolio by venturing into the smart meter sector. Analysts are optimistic about the company’s strategy to revamp its business, with a focus on energy generation, utility services, and EV charging. Furthermore, they have effectively overhauled their balance sheet through advantageous settlements.

Looking forward, analysts are confident that GMR Power has the potential to enhance and maintain its financial performance in the future.

In the recently concluded June quarter, GMR Power's total income rose 46 percent year-on-year (YoY) to Rs 1,740 crore driven by consolidation of GMR Energy entities. The company also reported a profit of Rs 1,360 crore in Q1FY25 versus a loss of Rs 200 crore in the year-ago period.

At the operational level, the company's EBITDA jumped by 12 percent YoY to Rs 640 crore in Q1FY25, whereas margins improved to 38 percent.

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