The company is into engineering and manufacturing of customized process equipment and industrial drying solutions and packages.
Recently, they have ventured into fabrication of critical equipments like silos and pressure vessels.
They cater to a wide range of industries like chemicals, oil & gas, food, pharma, fertilizer etc.
They also collaborate with MNCs like Nara Machinery (Japan), Carrier (USA), Idreco (Italy).
They have capabilities to handle a wide array of metals like titanium, stainless steel, nickel based alloys, aluminium and carbon steel.
They have acquired M.E. Energy Ltd., a leader in waste heat recovery and waste heat reutilization systems. For this they also did a QIP.
Since last year, the promoter group has taken a back seat and handed over day to day operations to a professional management team.
The management has guided for OPM to be in the range of 16-17% and sales to be of 275 Crores in this year.
Despite widespread malaise in the Indian specialty chemicals industry, they seem confident of growth and ability to capture new business from Chinese peers.
Risks:
During Covid, the company chose to write off 122 CR worth of ICDs due to trouble in group companies. Williamson Magor group (Khaitan family) sold off half of their stake to Oriental Carbon Group (Goenkas) and brought in professional management to grow the company. The Khaitan family continues to hold 22% stake. We need to track improvement in accounting practices going forward.
Recently the company did a QIP to fund their acquisition. None of the companies and individuals who were allotted the shares are known/reputed institutions. They are unknown entities who ‘seem’ to be a proxy for promoter group or friends and extended family.
At a PE of 25, the stock is up close to 300% in the last 1 year and the rerating due to addition of a new promoter and professional management is over. Going forward, earnings growth and margin stability will drive returns.
If there is a significant China slowdown, there could be a dumping of industrial goods and the company will be impacted.
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