Godawari Power & ISPAT shares witnessed a remarkable surge on Monday, defying weak quarterly results and showcasing strong investor confidence in the company's long-term prospects.

Stock Performance

• GPIL shares soared over 10% to reach an all-time high of ₹275 before closing at ₹269.7.
• This marked the stock's most significant single-day gain in recent times.
• Trading volumes hit 4.5 crore shares, the highest since June 2023 and substantially above the 20-day average of 44 lakh shares.
• The stock has risen 33% year-to-date and has consistently delivered positive annual returns since 2019.

Q1 Financial Results

Despite the stock's stellar performance, GPIL's Q1 results painted a different picture:

Production Guidance Progress

By the end of the June quarter, GPIL had achieved:

• 25% of its production guidance for rolled products
• 30% of its production guidance for ferro alloys

Investor Interest

The company's recent LODR (Listing Obligations and Disclosure Requirements) filing indicates growing investor interest. Godawari Power & ISPAT announced that representatives from Inved Research will be visiting the company's plant in Siltara Industrial Area, Raipur, Chhattisgarh. The management will participate in a one-to-one meeting with the visitors, highlighting the company's commitment to transparency and engagement with the investment community.

Market Outlook

The stark contrast between GPIL's stock performance and its quarterly results suggests that investors may be looking beyond short-term fluctuations. The company's progress towards its production targets and the upcoming investor visit could be factors contributing to the positive market sentiment.

As Godawari Power & ISPAT navigates through challenging market conditions, the company's ability to maintain investor confidence while working towards its long-term goals will be crucial. The upcoming plant visit by Inved Research may provide further insights into the company's operations and future prospects, potentially influencing investor perceptions in the coming weeks.

Godawari Power & Ispat Limited (GPIL) has announced ambitious expansion plans totaling INR 1,600 crore, as the company reported steady financial performance for the first quarter. The steel and power major is set to diversify into new energy sectors while maintaining its core focus on steel production.

Expansion Plans

GPIL's Board of Directors has approved two significant projects:

1. Cold Rolling Mill Complex: A INR 900 crore investment to establish a 0.7 million ton capacity cold rolling mill complex. This facility will produce value-added steel products, including color-coated steel, zinc-aluminum-magnesium steel, and galvalume products.

2. Battery Energy Storage System (BESS): A INR 700 crore project to set up a 10-gigawatt battery energy storage system in Maharashtra. This venture into the renewable energy sector marks a strategic diversification for the company.

Q1 Financial Performance

Despite challenges, GPIL maintained a robust financial position in Q1:

• EBITDA Margin: 24.00%
• PAT Margin: 15.00%

The company's performance remained largely stable on a quarter-on-quarter basis, despite a fall in iron ore mining production due to delays in mining plan approval for the Boria Tibu mines.

Operational Highlights

• Ferro alloys production and sales volume increased by about 15.00% and 13.00% year-on-year and quarter-on-quarter, respectively.
• The company has already achieved 20-25% of its volume guidance.
• GPIL received approval from Power Grid Corporation of India Limited (PGCIL) to supply steel billets for transmission projects, opening up new market opportunities.

Future Outlook

GPIL expects to receive all necessary approvals for Ari Dongri mining capacity expansion from 2.35 million to 6 million tons by Q3. The company's 2 million ton pellet expansion project is on schedule, with commissioning expected in October.

The management expressed confidence in achieving the volume guidance provided at the beginning of the year. They anticipate a busy season ahead, with steel prices already showing an upward trend.

Market Dynamics

• Iron ore pellet prices are expected to remain in the range of INR 8,500 to INR 10,000 per ton in the Raipur market.
• The company sees a current shortage of pellets in the Raipur market due to increased DRI capacity in the region.
• GPIL's landed cost of imported coal stands at approximately INR 11,500 per ton, with similar levels expected for Q2 and Q3.

As Godawari Power & Ispat Limited embarks on its expansion journey, the company aims to capitalize on emerging opportunities in both the steel and renewable energy sectors, while maintaining its strong position in its core business segments.