Defence stock with capex plan of 1200 Cr to manufacture aircraft components

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Defence stock with capex plan of 1200 Cr to manufacture aircraft components

During Tuesday’s trading session, the shares of a company engaged in the business of fabrication and machining of components used in the Defence Sector and many more jumped nearly 0.11 percent to Rs. 1,668 on BSE.

Stock Performance:

With a market cap of Rs. 2,253.64 crores, the shares of NIBE Limited were trading in the green at Rs. 1668, up by nearly 0.11 percent, as against its previous closing price of Rs. 1,666.15.

The stock has delivered multibagger returns of nearly 123 percent in one year, but around 2.85 percent of negative returns in the last six months. So far in 2024, the shares of NIBE have given multibagger returns of about 162.71 percent.

Recent Developments:

On 17th September, the Government of Maharashtra’s Department of Industries, Energy, Labour, and Mining granted NIBE a “Mega Project” status to a proposed manufacturing facility at MIDC, Shirdi, Ahmednagar.

This facility, with an estimated investment of Rs. 1,200 crores, will manufacture aircraft components such as vertical & horizontal stabilizers, wings, jet engines, cockpits, fuselages, slats, spoilers, ailerons, flaps, elevators, and rudders. As part of this mega project status, NIBE will receive various benefits, including the allocation of 300 acres of land by MIDC, Shirdi.

On 6th November, NIBE signed a term sheet to set up a joint venture (JV) in India with a US-based Sig Sauer, a globally-renowned firearms and weapons manufacturer of premier global military, law enforcement and commercial users.

The proposed JV will focus on manufacturing weapons and defence products for the Indian military, paramilitary, security and police services, with NIBE holding a 51% stake and Sig Sauer 49%.

The company also finalized licensing agreements with (i) Vehicles Research & Development Establishment (VRDE), Ahmednagar, (ii) High Energy Material Research Laboratory (HEMEL), Pune, and (iii) Instruments Research & Development Establishment (IRDE), Dehradun—organizations under the DRDO, Ministry of Defence.

These agreements enable the Transfer of Technology to manufacture and sell (i) a Full Trailer of the 70th Tank Transporter for MBT Arjun MK -1A (ii) OPX-Revilator and (iii) Laser Photoacoustic Spectroscopy (LPAS) equipment to the Indian Armed Forces and other government agencies at both central and state levels.

Financials:

NIBE reported a significant growth in the revenue from operations, experiencing a year-on-year increase of nearly 230 percent, rising from Rs. 41.2 crores in Q2 FY24 to Rs. 136 crores in Q2 FY25.

Similarly, the company’s net profit increased by around 218 percent YoY from Rs. 2.8 crores to Rs. 8.9 crores, over the same period.