Solar stock rises by 4% following its partnership with LESSzwei GmbH to develop electric vehicle charging infrastructure in Germany.

The shares of the solar product manufacturer experienced an increase of up to 4 percent following the company's collaboration with a Germany-based firm to establish EV Charging Infrastructure.

With a market capitalization of Rs 4,169.42 crore, Servotech Power Systems Ltd (NS:SERO) saw its shares trading at Rs 187.36 each, reflecting an approximate rise of 3 percent from the previous closing price of Rs 182.36 per share.

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Reason for Increase:  

The company's stock has demonstrated a positive trend after Servotech Power Systems Ltd formed a strategic alliance with LESSzwei GmbH (LESS2) to create and implement innovative 100% solar-powered EV charging infrastructure for micro-mobility solutions, including e-bikes, e-scooters, and e-cargo bikes in urban regions of Germany.

This initiative, titled “EnerMAAS,” aims to establish a sustainable and scalable charging ecosystem. It incorporates AI-driven energy management systems to optimize energy consumption and minimize environmental impact. EnerMAAS will focus on converting existing photovoltaic systems and energy storage into advanced street charging points (BIKE-Ports).

Moreover, these stations will provide self-sufficient energy through 100% solar power, enabling rapid and reliable charging at all hours. Each station is designed to charge four two-wheelers simultaneously, delivering a total power output of 3.3 kW. This project has also secured grant funding from Germany’s Federal Ministry for Economic Affairs and Climate Action (WA:ACT) (BMWK) for a duration of 2.7 years.

In addition, Servotech will oversee the manufacturing and distribution of these solar-powered EV charging stations, while LESS2 will focus on all aspects of Artificial Intelligence and Application Development. Servotech plans to initially deploy the first 100 systems, with two charging stations set up in each of 50 selected towns across Germany.

1. Financial Performance:  

The company's financial outlook reveals a remarkable increase in revenue, which surged by 171 percent, rising from Rs 67 crore in Q2FY24 to Rs 182 crore in Q2FY25. Concurrently, net profit experienced a significant escalation of 267 percent, climbing from Rs 3 crore to Rs 11 crore during the same timeframe.

EV Market Insights:  

Government efforts aimed at diminishing reliance on fossil fuels and fostering the adoption of electric vehicles (EVs) have significantly enhanced the market landscape. The acquisition of substantial DC fast charger orders from leading oil companies and original equipment manufacturers (OEMs), coupled with a current capacity utilization rate of 60%, positions the company favorably for a potential capacity expansion as infrastructure evolves.

New Development:  

The company has introduced a range of solar inverters, including hybrid and microinverters, along with energy storage systems and solar pump controllers. These products are designed to cater to the PM Surya Ghar Yojana, as well as the commercial, institutional, and end-user sectors. Anticipated revenue contributions from these solar offerings are expected to materialize in Q4 FY25.

International Expansion:  

The organization is poised for international growth, with plans to target 40 to 50 countries. In the first half of FY25, export revenues reached ₹10 crores from sampling, while total exports for the previous year amounted to approximately ₹40 crores, underscoring a robust foundation for expansion in global markets.

Order Book and Future Guidance:  

The current order book of the company exceeds ₹600 crores, with 70% attributed to the EV sector and 30% to solar products. Management is focused on achieving a monthly production capacity of 2,000 units, dependent on addressing infrastructure challenges, which reflects a strong confidence in future growth prospects.

Company Snapshot:  

Servotech Power Systems Limited is engaged in the manufacturing, sourcing, and distribution of a diverse array of advanced solar products, medical devices, and energy-efficient lighting solutions. The company is actively pursuing various initiatives, including the installation of solar panels for battery charging and photovoltaic (PV) ports.