SPML Infra Limited secured a ₹1,128 crore contract from NTPC Limited on Wednesday to develop a 1 GWh Battery Energy Storage System (BESS) at the Barauni Thermal Power Station in Bihar. According to reports from The Hindu BusinessLine, this contract represents one of the largest single BESS orders in India to date and marks SPML Infra's first large-scale grid battery storage project. The project involves an 18-month construction period followed by 15 years of operation and maintenance, with the BESS helping to stabilize the grid, manage peak electricity demand, and integrate renewable energy sources with the thermal power plant.
The announcement sent SPML Infra's shares up 4.20 per cent to ₹222.81 on the NSE by midday, touching an intraday high of ₹234.80. As reported by The Hindu BusinessLine, trading volumes reached 27.08 lakh shares worth ₹61.51 crore. The stock has delivered exceptional returns of 562 per cent over three years and 32.68 per cent over the past year, significantly outperforming the Nifty 50's returns of -1.26% and 33.23% respectively over the same periods. However, the company's trailing twelve-month (TTM) Price-to-Earnings ratio between 29 and 31 is higher than the industry average P/E of 22.26, raising questions about its valuation despite the positive contract win.
The contract scope covers supply, civil construction, and installation of a 250 MW/1,000 MWh system comprising 5 MWh DC containers equipped with Battery Management Systems and Thermal Management Systems, along with 33 kV panel boards, 220 kV switchyard, and associated cabling. According to The Hindu BusinessLine, execution is scheduled over 18 months, followed by a 15-year operation and maintenance period. SPML Infra will execute the project in partnership with Energy Vault (NYSE: NRGV) as its technology provider. Managing Director Abhinandan Sethi described the win as a "defining moment" that shows the company's commitment to the growing energy storage market and its goal to "architect" India's energy future.
Despite the positive contract news, SPML Infra faces significant financial challenges that raise concerns about its ability to execute the large project. The company reported a revenue decrease of 41.6% in fiscal year 2025, with revenue declining at an average annual rate of 1.34% over the last five years. Its Return on Equity (ROE) is around 6-8%, indicating modest profit generation from shareholder investments. Additionally, the company's working capital days have increased significantly from 61 to 131 days, raising concerns about operational efficiency and cash flow management. The company's stock has been highly volatile, with significant swings in P/E ratio over the last decade, suggesting price movements may be driven more by speculation than consistent earnings.
