Whalesbook
ideaForge Technology Ltd. shares climbed 10% after the company announced two new orders from the Ministry of Defence worth a total of ₹107 crore. The orders include the supply of tactical UAVs (₹75 crore) and hybrid UAVs (₹32 crore), to be executed within 12 and 6 months, respectively. This news comes as the company reported its first revenue growth in four quarters for Q2FY24, although it remained loss-making.
ideaForge Technology Ltd. saw its stock price jump by approximately 10% on Monday, November 17, following the announcement of two significant orders from the Ministry of Defence.
The first order, valued at ₹75 crore, is for the supply of AFDS / Tactical class Unmanned Aerial Vehicles (UAVs) along with accessories, and is expected to be completed within 12 months. The second order, for the supply of hybrid UAVs with accessories, is worth ₹32 crore and has a six-month execution period.
These order wins provide a boost amidst ongoing financial challenges. For the September quarter (Q2FY24), ideaForge reported its first year-on-year revenue growth in four quarters, up 10%. However, revenue decreased by 57% sequentially. The company continued to incur losses for the fifth consecutive quarter, though losses narrowed sequentially. The order book stood at ₹164 crore at the end of the quarter.
There's a notable shift in revenue contribution, with the defence segment's share dropping to 63% from 86% last year, while the civil segment's contribution rose to 37% from 14%.
ideaForge shares traded up 10.2% at ₹512. Despite the current surge, the stock remains down 62% from its post-listing high and is trading below its IPO price of ₹672.
Impact:
This news of substantial order wins from a key client like the Ministry of Defence is positive for ideaForge. It boosts the company's order book, provides revenue visibility, and signals continued demand for its defence-related products. This is likely to improve investor sentiment in the short term, although the company's overall profitability and stock performance recovery will depend on continued order flow and improved financial results.
Rating: 7/10
Definitions:
UAV (Unmanned Aerial Vehicle): Also known as a drone, this is an aircraft without a human pilot on board. It can be remotely controlled or fly autonomously.
Sequential Basis: Refers to a comparison between two consecutive periods, such as one quarter compared to the previous quarter.
Order Book: The total value of orders received by a company that have not yet been fulfilled.
