Company is into manufacturing and supply of forgings and precision engineering components.
They are ISO certified and have factory in Karnataka. 90% of sales is from exports across 80 countries.
They spend 2-4% of sales on R&D and have 45 members in it.
The end user industries are automobile, railways, defence, agriculture (majority), oil & gas and new energy.
Management has guided for 25% revenue growth with EBITDA margins of 20-22%.
Last year Sales were 327 CR, the company has recently done QIP to raise 150 CR. This is being done to double their capacity which will get operationalized in about 2 quarters. Management has said commissioning of the new plan will lead to higher margins.
With government capex in railways and defence booming, the company is expecting a good amount of order in flow.
Their R&D team is investigating exciting projects – like lithium batteries, electric charging stations, hydrogen opportunity etc.
Several star investors like Ashish Kacholia and Samit Vartak hold minor stakes.
Risks:
Company has poor cash flows as compared to its ambition. This has led to consistently negative CFO and company is forced to dilute equity and raise funds.
Due to the nature of the business, the company’s working capital cycle is around 150 days.
If there is a global slowdown or currency risk, the company will be affected because as of now domestic sales is just 10%.
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