Bulk Deal Alert: Shankar Sharma Sells 200,000 Shares of this Drone Stock

As usual, we're back with a seasonal article that covers bulk deals involving the top investing gurus in India.

For individual investors, the takeaway could be their dynamic strategies and understanding their methodologies and the risks associated.

Yesterday, Shankar Sharma sold 200,000 shares of a drone company via a bulk deal on the BSE.

Who is Shankar Sharma?

Shankar Sharma is one of India's well-known investing gurus.

People look forward to his interviews as they are full of colourful metaphors, witty one-liners, and smart observations.

According to data provided by the exchanges, Sharma publicly holds 3 stocks with a net worth of over Rs 756 million (m).

Which Drone Stock Did Shankar Sharma Sell and Why?

The stock in question is Droneacharya Aerial Innovations.

On 02 May 2024, Shankar Sharma sold 200,000 shares of the drone company on the BSE via a bulk deal.

According to the latest shareholding pattern of Droneacharya, Shankar Sharma's name was missing from the shareholders list.

This means he had less than 1% stake in the company.

The names of investors who hold 1% or more equity in a listed company appear on the public shareholders list.

Note that this decision by the superstar investor could prove him costly or at least cost him potential gains as Droneacharya Aerial is in the news right now for all the right reasons.

A month ago, the drone company inked a landmark agreement with CBAI Technologies which involves a procurement of 200 Type Certified training drones over a span of three years.

A week later, it again secured a work order valued at Rs 53 lakh from Alter Dynamics & Artificial Intelligence.

This project involved utilization of drones for the inspection of piles above water, catering to the stringent requirements of Abu Dhabi National Oil Company (ADNOC).

Earlier this year in March, the company forayed into the Southeast Asian market with the inauguration of a new office in Bangkok.

Initially, it will focus on key markets in Southeast Asia, including Thailand, Malaysia, the Philippines, Cambodia, and Indonesia.

Strong Growth Prospects

The Indian drone industry is in its infancy stage compared to the drone market in the USA, China, and Israel.

However, it is one of the fastest-growing drone markets in the world, growing at a CAGR of 10.3% between 2023 and 2028.

With the government's aim to make India a global drone hub by 2030, the Indian drone market is expected to reach Rs 2.5 trillion by 2030.

This growth is supported by the use of drone technology in multiple sectors, including defence, agriculture, logistics, mining, infrastructure, and oil and gas.

To add to this, several government schemes such as 'Drone Rules, 2021', the Product Linked Incentive (PLI) Scheme, and the Drone Shakti Scheme are encouraging the manufacturing and usage of drones in India.

It's no wonder that Indian drone companies attracted an investment of US$ 50 m in the financial year 2023.

With such a huge opportunity, Droneacharya is well-equipped to benefit from it.

Here's a table showing the company's historical financial performance.

Financial Snapshot

Rs m, standalone	FY20	FY21	FY22	FY23
Net Sales	-	0	36	186
Growth (%)	-	-	-	418%
Operating Profit	-0	-1	6	56
OPM (%)	-	-	16%	30%
Net Profit	-0	-1	4	34
Net Margin (%)	-	-	11%	18%
ROE (%)	0.0	-28.9	5.3	8.5
ROCE (%)	0.0	-28.3	7.0	11.5
Dividend (Rs)	0.0	0.0	0.0	0.0
Debt to Equity (x)	-0.9	0.0	0.0	0.0

Data Source: Ace Equity

How Droneacharya Aerial Share Price has Performed Recently

In the past 5 days, Droneacharya Aerial share price has declined over 7%.

In 2024 so far, the stock is down 19%.

Droneacharya Aerial has a 52-week high of Rs 221 touched on 27 October 2023 and a 52-week low of Rs 125 touched on 13 March 2024.

In the past one year, shares of the company have remained rangebound.

Here's a table comparing Droneacharya with its peers -

Comparative Analysis

Company	Droneacharya	BLS E-Ser.	Drone Destination	Gretex Corp	Innovatus Ent.
ROE (%)	8.5	2.1	27.4	37.8	13.4
ROCE (%)	11.5	10.1	33.2	48.2	12.6
Latest EPS (Rs)	1.4	0.1	1.0	6.5	1.2
TTM PE (x)	105.8	0.0	257.9	85.1	31.2
TTM Price to book (x)	5.5	6.6	8.5	8.1	1.2
Dividend yield (%)	0.0	0.0	0.0	0.1	0.0
Industry PE	50.5
Industry PB	8.1

Data Source: Ace Equity

About Droneacharya Aerial Innovations

Droneacharya Aerial Innovations is a pure-play drone company incorporated in 2017.

It provides a high-end ecosystem of drone solutions for multi-sensor drone surveys, data processing of drone data using robust high-configuration workstations, drone pilot training, and specialised GIS (Geospatial Information Systems) training.

The company's offerings are broadly divided into four categories, namely, training, services, surveillance, and others.

It has operations in India, the USA, the Netherlands, Dubai and Thailand. It is expanding its footprint further to several other countries.

To know more, check out its financial factsheet and its latest quarterly results.

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...