Multibagger EV Penny Stock Develops New Battery Charger

The sheer growth of the electric vehicle (EV) battery developer ecosystem is breathtaking.

Technical talent is flocking to the digital frontier at an accelerating pace, and we don't see this trend slowing down anytime soon.

The bigger players in the industry Amara Raja, Exide and HBL Electric, still dominate the community, both in terms of market share and number of batteries developed.

There are, however, smaller players joining this space and looking at various segments of the EV ecosystem.

Take for instance MIC Electronics.

A global leader in the design, development & manufacturing of high-end telecom equipment, the company last night announced that it has developed a 42V/3A EV battery charger for e-cycles and two-wheelers.

The charger will be launched in the coming days and commercial operations will begin in March 2024.

About MIC Electronics

At one point in time, MIC Electronics was ranked first in the true color display segment.

The company's revenue is divided into these three segments -

• LED Lighting
• LED Displays
• Oxygen concentrators

It has served several clients over the years including L&T, Indian Railways, MTNL, SBI, P&G, LIC, Reliance Industries, Tata teleservices, among others.

The company has subsidiaries in the US and Australia, which provide direct access to North American and Australian markets.

Post its acquisition of InfoSTEP, the company expanded in the US, exporting 23,000 sets of true colour LED displays and solar-powered street lighting products.

Meet MIC Electronic's New EV Charger!

In an exchange filing, the company said it has developed an EV battery charger for e-cycles and two-wheelers, which will play a crucial role in ensuring the efficient and convenient charging of the batteries that power EV vehicles.

Further, it announced that they're also developing high power rating EV battery chargers for e-cycles and two-wheelers.

Following this announcement, shares of the company rallied 10% yesterday and another 10% today to near its record high levels.

You see, when a penny stock announces a groundbreaking partnership with regards to EV battery industry, or if it announces a cutting-edge product in the same field, or be it a lucrative contract, it could spark a surge in investor interest and propel the stock higher.

It was in May 2022 when MIC announced its foray into the EV sector.

Back then, it had only one primary goal - to diversify into manufacturing of all kinds of EV batteries, including Li-ion batteries.

Since then, it has come a long way with the financial numbers showcasing improved performance.

After posting a loss for more than 10 consecutive years, the company turned profitable in 2022 and it's looking at the highest net profit this year going from its quarterly performance.

Financial Snapshot

Rs m, standalone	FY19	FY20	FY21	FY22	FY23
Net Sales	48	19	11	449	229
Growth (%)	-97%	-62%	-41%	4024%	-49%
Operating Profit	-191	-161	15	80	34
OPM (%)	-394%	-866%	137%	18%	15%
Net Profit	-275	-240	-54	30	2
Net Margin (%)	-568%	-1289%	-497%	7%	1%
ROE (%)	0	0	0	0	5.4
ROCE (%)	-103.2	-243.8	-23.9	9.4	1.4
Dividend (Rs)	0	0	0	0	0
Debt to Equity (x)	-1	-1.1	-0.6	1.8	3.6

Data Source: Ace Equity

What Next?

The company recently released its quarterly results and posted a net profit of Rs 27.1 million (m) in the December 2023 quarter against a net loss of Rs 96 lakh in the year-ago period.

This included a one-time exceptional item of Rs 66.3 million.

Revenues surged multifold to Rs 175 million compared to just Rs 12.4 million in the year-ago period.

For the first nine months of FY24, the company derived around 71% of its revenue from the LED segment followed by 27% from automobile and 2% from medical & others.

In the quarter gone by, the company divested its entire stake in subsidiary Bikewo Green Tech. This company derived most of its revenue from the Indian railways.

Note that MIC Electronics has received a slew of orders in the past six months, with majority of orders catering to the railways space and for semiconductor chips.

Think of small orders like replacement of IP based integrated passenger info at stations.

It is expanding towards areas to identify profitable business lines beyond its core operations in the Indian Railway sector.

Going forward, revenue contribution from its battery division could see an uptick.

As of December 2023, promoters hold over 74% stake in the company.

How MIC Electronics Share Price has Performed Recently

In the past five days, MIC Electronics share price has rallied 18%.

Shares of the company surged 10% in early trade today and are locked in the upper circuit band at Rs 46.79.

MIC Electronics has a 52-week high of Rs 48 touched on 23 October 2023 and a 52-week low of Rs 11.37 touched on 23 February 2023.

In the past one year, this penny stock has rallied over 280%.

Data Source: Ace Equity

Here's a table comparing MIC Electronics with its peers -

Comparative Analysis

Company	MIC Electronics	Aartech Solonics	Artemis Elect	HPL Electric
ROE (%)	5.4	6.6	8.7	3.9
ROCE (%)	1.4	8.8	8.9	8.9
Latest EPS (Rs)	0.5	1.8	0.5	5.5
TTM PE (x)	83.4	80.9	80.7	62.4
TTM Price to book (x)	12.9	4.9	13.9	2.7
Dividend yield (%)	0	0.4	0	0.3
Industry PE	75.4
Industry PB	12.6

Data Source: Ace Equity

Happy Investing.

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...