Company Name: Shivalik Bimetal Controls LTD
Company Name: Shivalik Bimetal Controls LTD
Company Name: Shivalik Bimetal Controls LTD
“Outlook for the SHIVALIK’s business in the medium to long-term remains positive given the
diverse usage of its products. It is a promising sign that the government’s plans and policies
are conducive towards the growth of the SMART Metering, EVs and Switchgear market. In
fact, the major factor that drives the smart meter, EVs market growth is supportive
government policies and financial incentives such as production-linked incentive (PLI) scheme
in automobiles & auto components with an approved financial outlay over a five-year period of
Rs.57,042 crore (US$8.1billion) to boost India’s manufacturing capabilities, exports and
promote the ‘Atmanirbhar Bharat’ initiative, FAME II (Faster Adoption and Manufacturing of
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(Hybrid) and Electric Vehicles in India) scheme, Automotive Mission Plan 2016-26 and
Liberalization in the FDI policies.”
There are only 15 Lac smart meters in India, FY23 target is 10 Cr and opportunity size
is 25 cr+. Delayed but gaining traction, massive Opportunity.
Net buying volume from Feb 2021, The share price have appreciated more than 5 times, but the
PE is still 28.
RISKS/NEGATIVES
Susceptibility to volatility in raw material prices and forex rates: With metals such as nickel and copper
forming around 50% of overall cost, operating margin remains susceptible to volatility in commodity
prices. Though metal prices may continue to fluctuate, this risk is mitigated by order-backed processing
undertaken by SBCL on highly customised products.
Working capital-intensive operations: Gross current assets stood at 168 days as on March 31, 2020,
because of sizeable inventory and large receivables. Raw materials inventory of around 120 days is
maintained as procurement is imported, and includes a variety of alloys.
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Price Volume Action
Financials:
Highlights
● The main factor in share price growth over last 10 years is Earnings. This is
upto latest financial year end
● The main driver of ROE trend over last 10 years is Net Profit Margin
● Company has a lot of operating leverage. Increase in sales can result in
disproportionate increase in operating income
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Conclusion:
Niche player and clear sector tailwinds. It should be in the watch list