With a market capitalization of Rs 500 crores, the shares of Mic Electronics Limited opened its trading session at Rs 23.70 and, since then, have been locked in the 5 percent upper circuit. The locked price is also recorded to be the stock’s 52-week high mark.
Such movements in the stock prices are observed after the company, through a regulatory filing with the exchange, informed that the company received a Letter of Acceptance (LoA) from the Salem Railway Division for providing a passenger information system under the ‘Amrit Bharat’ scheme.
The said order is to be worked upon for Chinna Salem, Karur, Namakkal, Erode stations as well as CAMC for a period of 5 years. The aggregate value of the work order is around Rs 5 crores and the same is required to be executed within a period of six months from the date of issue of the LoA.
The recent financial numbers show that the operating revenues have reduced from Rs 44 crores during FY21-22 to Rs 22 crores during FY22-23 indicating a 50 percent decrease.
Despite the numbers shown above, the company’s operations, in recent quarters, have shown improvements with the most recent change from Rs 7 crores of revenues in the quarter ending December 2022 to Rs 11 crores in the quarter ending March 2023.
MIC Electronics Limited is engaged in the process of designing, developing and manufacturing LED video displays, telecom software, and other types of equipment. The company’s operating segments comprise LED products (Automobiles & Medical appliances). The company primarily generates revenue from domestic operations within India.
The Price-to-Equity (P/E) ratio of the company stands at Rs 2,370 and, as compared to the sector P/E of Rs 34.59, the stock trades at very high P/E levels.
Investments in Penny Stocks are highly risky considering the market capitalization and illiquid trading of stocks. Hence, it is recommended to take an entry into the same after doing a thorough analysis or consulting your investment advisor.
Written by Amit Madnani
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