The shares of this smallcap company locked a 5 percent upper in Monday’s trading session after entering into a revenue-sharing agreement with BSNL to deliver telecom services (including fixed, wireless, broadband, etc.) to end users in Delhi.
Price Movement:
With a market capitalization of Rs. 1,331 crores, the shares of Sar Televenture Ltd Monday’s trading session on a higher note at Rs. 358.30, clocking a 5 percent upper circuit compared to its previous close of Rs. 341.25 apiece.
Is Sar Televenture a buy or sell? What is its Fair Value? What are the company's health parameters? What are the positive and negative factors driving the company -- ProTips? Know all the answers on the company's overview page here.
What Happened:
Such a bullish movement in the share price was observed after the company in an exchange filing announced that it had entered into a revenue-sharing agreement with Bharat Sanchar Nigam Limited (BSNL) to deliver BSNL telecom services (including fixed, wireless, broadband, etc.) to end users in both urban and rural areas of Delhi.
The project entails constructing and expanding the Optical Fiber Cables (OFC) network within residential and commercial complexes, establishing OFC links between buildings, and installing and maintaining overhead OFC backhaul from the nearest BSNL pickup point to the Optical Line Terminal (OLT).
It also includes setting up interconnectivity at the network operation centre and providing maintenance support for existing telecom infrastructure and equipment as required.
The agreement will be valid for 5 years in urban areas and 10 years in rural areas, with the option to renew under similar or mutually agreed terms thereafter and revenue is evenly distributed, with each of the two companies receiving an equal 50 percent share.
Financials:
Looking at the company’s financial statements, the revenue zoomed by 144 percent from Rs. 36 crores during H1FY24 to Rs. 88 crores in H2FY24. In addition, the net profits magnified by 200 percent from Rs. 4 crores to Rs. 12 crores during the same period.
Future Outlook:
The company aims to expand its presence in the Indian telecommunications industry by providing comprehensive telecommunication solutions to telecom network operators.
Furthermore, the company will be investing Rs. 27,300 lakhs for setting up Fiber-to-the-Home (FTTH) network solutions for 3 Lac Home Passes.
Important Financial Ratios:
In terms of key financial metrics, the company reported a Return on Equity (RoE) of 21.81 percent and a return on capital employed (RoCE) of 6.48 percent for the period spanning FY23-24. Additionally, during the same period, the net profit margin stood at 12.61 percent.
Company Profile:
Headquartered in Haryana, Sar Televenture Ltd was incorporated in 2019. The company is a provider of telecommunication solutions to Telecom Network Operators engaged in the installation and commissioning of 4G and 5G Towers, Optical Fibre Cable (OFC) Systems, and dealing in network equipment.
Written By Vaibhav Patil
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