Penny stock jumps 9% after securing 6 MW solar power project from HESCOM

Synopsis: Promax Power surged 9%  after securing a 6 MW solar project from HESCOM under the BOO model, offering Rs. 70–75 crore long-term revenue potential and marking its entry into the power generation segment.

This company is in the business of engineering, procurement, and construction (EPC – power & solar) projects for electrification, power substations, and underground cabling is now in the spotlight after securing an order from Hubli Electricity Supply Company Limited (HESCOM).

With a market capitalisation of Rs. 59.9 cr, the shares of Promax Power Ltd are currently trading at Rs. 23.94 per share, increasing nearly 9% in today’s market session, up from its previous close of Rs. 22 per share.

About the order

Promax Power Limited has about the receipt of a Letter of Award (LOA) from Hubli Electricity Supply Company Limited (HESCOM), a Government of Karnataka undertaking. The LOA is for setting up a 6.0 MW (AC) grid-connected solar power project under the Build, Own and Operate (BOO) / RESCO model.

The project will be executed for a contract period of 25 years from the Commercial Operation Date, ensuring long-term revenue visibility. The tariff approved for the project is Rs. 2.97 per unit (inclusive of taxes), translating into an estimated revenue potential of Rs. 70 to 75 crore over the contract tenure, subject to actual power generation.

This order is strategically significant as it marks Promax Power Limited’s entry into the power generation segment. The project strengthens the company’s renewable energy portfolio and supports its focus on building stable, long-term, recurring revenue streams in the clean energy space.

About the company 

Promax is an engineering company with over 15 years of experience in project management and execution. It focuses exclusively on core business, delivering turnkey solutions across power, substations, transmission lines, hydro, distribution, electrification, civil construction, pre-engineered buildings, high-rise buildings, and water & sewerage treatment projects. 

The company maintains a ROCE of 11.0% and a ROE of 8.10%, reflecting moderate efficiency in utilizing capital and shareholder funds. With a debt-to-equity ratio of 0.66, the capital structure remains balanced and manageable. A PEG ratio of 0.19 indicates that the stock may be undervalued relative to its growth prospects.

Sales of the company fell from Rs. 37.08 cr in H2FY25 to Rs. 36.33 cr in H1FY26. Operating profit increased to Rs. 2.62 from Rs. 2.32 cr. Net profit grew from Rs. 1.07 cr to Rs. 1.36 cr over the same period.

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