look news india
There was a huge rise in the shares of small cap company South West Pinnacle Exploration Limited after the news of getting a big contract worth Rs 158 crore from Reliance Industries. The company’s shares rose 10% to the upper circuit of Rs 165.27 in early deals on NSE on January 1.
What is the contract?
South West Pinnacle has been awarded this major contract to expand the process of drilling and production holes for coal bed methane (CBM) production in Madhya Pradesh. This contract will increase the company’s existing order book to Rs 495 crore.
impact on stock performance
- At around 11:15 am, the company’s shares were trading at Rs 159.20, up 6%.
- In the last two months, the stock witnessed a strong wave of buying, with gains of 17% in November and over 5% in December.
- The stock had touched a 52-week high of ₹183 on January 2 last year and a low of ₹98.10 on March 13.
Success in Reliance Projects
The company said in the filing that it has successfully completed two major projects of Reliance Industries and has been executing the first phase of this contract for the last 14 months. Now, with the Phase-2 expansion underway, three possible further six-month extensions remain a possibility.
Statement of the company chairman
Company Chairman and Managing Director Vikas Jain said:
“This extension of the existing contract with Reliance Industries will almost double our revenues. “This expansion brings us a strong order book and guarantees medium to long-term business.”
vital statistics
- The company added new orders worth Rs 309 crore in the first nine months of the current financial year.
- With the contract extension, the order book has reached its highest level.
- The deployment of additional equipment and manpower will double the company’s operations.
Message to investors
With this contract from Reliance Industries, South West Pinnacle has proved its reliability and delivery capability. According to experts, such big contracts open new avenues of growth for small cap companies.