Shivalik Bimetal Controls -
Q3 FY 24 results and concall highlights -
Revenues - 112 vs 108 cr ( up 4.3 pc )
EBITDA - 24 vs 28 cr ( margins @ 22 vs 26 pc )
PAT - 16 vs 18 cr
Company has 03 manufacturing capacities - all three located at Solan ( HP )
Plant - 1 - makes Shunt resistors using Electron Beam Welding technique ( difficult to master ). Shunt resistors are used to measure and regulate the flow of current in an electrical circuit. Find application in - EVs, smart meters, energy storage, power storage modules. Peak sales potential of this plant @ 700 cr
Plant -2 - makes Bimetal strips. Metals are joined post heating, taking advantage of their different coefficients of expansion as they respond to heating. Post bonding finishing is also done in-house. These are critical components used in overload protection devices. Find applications in - Switchgears, Medical devices, electrical appliances etc. Peak sales potential of this plant @ 600 cr
Plant -3 - makes electrical contacts. Contact materials used in such components are alloys of precious metals joined on to copper or copper alloys. These are the critical connecting points when a switch is turned on/off. Find applications in - smart meters, switchgears, wires and accessories etc. Peak sales potential of this plant @ 300 cr
Segment wise revenues -
Shunts - 51 vs 57 cr ( 50 pc of this is from the EV segment applications, around 20 pc from smart meters applications , 10 pc from energy storage applications and rest from Misc applications )
Bimetals ( includes electrical contacts ) - 61 vs 50 cr ( 65 pc from switch gears and circuit breaker applications, 15 pc from electrical appliances, 10 pc into metering apps and rest from misc applications )
Avg value of Shunts per EV varies from as low as Rs 20-30 to as high as Rs 2000 per EV , basically depending on EV to EV
Expect North American mkts for Shunt Resistors to start picking up from second half of this CY as the over stocking / inventory problems are likely to be behind by then
Smart meters demand from GoI’s initiatives is definitely an exiting opportunity. Company sees good demand from these initiatives going fwd
Company is in the process of forming a JV with Metalor Technologies. Metalor is the global leader in Bimetals and Contacts business. Exact modalities of the JV are yet to be formalised. Due diligence in progress
New facility for making Silver contacts is under construction ( 10 Km from Solan - towards Shimla ). This plant should be functional in next 4-5 months. Peak revenue potential of this plant should be around 250 cr
Base growth for next FY should be > 10 pc. However, if the EV mkt in US revives, this growth can be as high as 30 pc. Actually, all the company’s product segments are growing @ rates > 20 pc except the Shunt resistors for EVs due to the over-stocking and slowdown in North American EV mkts
Company’s revenue per smart meter should be aprox Rs 60-70 ( including both shunts and contacts )
Promoter do not have plans for further stake sale in the company
Present EBITDA margins for the contact business are around 11 pc. With new plant going on stream, margins should improve. Aiming at 1-2 pc margin expansion
EBITDA margins in the Shunts business are double or more vs the contacts business
Disc: holding, biased, not SEBI registered