Congratulations!!!
Just saw that you penned the original post in Dec 2020, way ahead of time, great conviction.
Still invested?
Must have been a fortune changer for you; for decent allocation, a real Multibagger for those who remained invested. Happy for you.
Hi Shanid,
Your conviction and clarity of thought were key reasons why I held on to ASM Technologies for as long as I have.
I have always appreciated your thoughts and analysis on the company.
Many thanks, and I am glad that this forum exists.
Disclosure of holding: I kept buying shares in ASM Technologies from 2021 to 2023, with an overall cost basis of ₹227. I have a fairly concentrated portfolio and do not own shares in more than 10 companies at any given time.
Asmtech new AR : Interesting details
Design led manufacturing. Unlocking new possibilities
ASMHHV Joint venture
ASM HHV Engineering Pvt. Ltd., the joint venture between ASM Technologies Ltd. and Hind High Vacuum Company Pvt. Ltd., focused in FY24-25 on technology development for new photovoltaic materials and cost-efficient polysilicon production. Collaborating with leading research institutions and vendors, the company advanced prototyping activities and engaged with major PV cell manufacturers for downstream adoption. The first intermediate storage
equipment for solar cell manufacturing is scheduled for delivery in FY25-26, alongside multiple sub-assembly****programs for wafer process R&D. Strategic discussions are also underway with an international silicon crystal pulling equipment manufacturer to strengthen India’s solar ecosystem. With solar as the immediate adjacency, ASM HHV is building a strong base to expand into advanced semiconductor technologies in the coming years.
Forms & Gears
FY25 has been a landmark year in both scale and strategic progress. We recorded the highest
turnover in our history, achieving nearly 2.5 times the growth over the previous year. This remarkable performance was primarily driven by robust demand in the electronics manufacturing sector, where our early investments in infrastructure and qualification processes have begun to deliver significant results.
Interesting details
ASM Technologies Limited will invest Rs 250 crore to establish a manufacturing facility in Hosur that will focus on LED equipment design and manufacturing for the electronics, semiconductor, solar, and allied industries. This will generate 1,100 jobs.
ASM technologies will invest Rs 250 crore to establish a manufacturing facility in Hosur that will focus on LED equipment design and manufacturing for the electronics ,semicon, solar and allied industries.
hello, been a silent consumer of this thread. Wanted to ask @shanid or @ankit_george how exactly do we value such companies without deep understanding of the business capabilities? Is there any benchmark company domestic or globally? The recent surge in the stock price is making me want to dig deeper but little information (apart from this superb thread) to build higher conviction. Edit: need more conviction to act on the small position I built earlier this year - one way or the other
So take everything I am saying with a metric ton of salt, since I have a very low cost basis.
In my view, you have to build your own conviction, taking into account the following points:
Do I have those answers at this point? No. But I will be reviewing the Annual Report and attending the AGM this month, and will share my thoughts here after completing those tasks.
Sure, Ankit. That’s helpful. Look forward to your thoughts post AGM.
Hi @ankit_george @shanid any idea about the AGM. Any video link? Or do u have any summary of the AGM. If so please share it.
Thanks in advance.
Sharing my thoughts from the AGM that took place on Friday below:
It was refreshing to hear this year’s AGM.
First off, the quality of questions from the shareholders continued on its upward trend. People are asking very clear questions to the management, which demonstrates that shareholders have a much better idea of the business and its future prospects these days.
Secondly, the management spoke with a level of confidence and conviction (without showing any arrogance and hubris) that was markedly different from previous years. They are successfully transitioning the company from an ER&D company to a DLM (design-led manufacturing) organization, so I feel that the confidence and conviction is warranted.
It was great to hear from Prasanth Sakhamauri, the MD of Hind High Vacuum speak this time around. As you may remember, ASM and HHV have formed a JV, that I believe is going to be of increasing importance going forward. He spoke about the goal to build tools, sub-systems and systems for the semiconductor industry. The company is working on innovations to process polysilicon faster and cheaper. Building partnerships/collaborations with photovoltaic companies are a work in progress. The end goal with this effort will be to help PV companies make new age solar cells.
They are also working on crystal pulling technology (expecting a prototype this year). For those who aren’t aware, semiconductors often require high grade monocrystalline silicon. For the solar industry, polycrystalline or amorphous silicon are good enough. The crystal pulling method helps form monocrystalline silicon, so I am very keen to hear about the progress that’s being made here.
At this point, the company is fervently working on designing various tools, systems and sub-systems for the semiconductor and solar industries, in addition to the consumer and industrial electronics space. Most of what the DLM division produces is counted as capex in these industries.
In the solar and semiconductor industries, the equipment has a longer life cycle. There is therefore a lot of scope to improve and customize equipment. In the electronics space (both consumer and industrial), life cycles are shorter (1-4 years).
The journey from design, to prototyping, to validating/qualifying, and finally to manufacturing (slowly building scale) for equipment can take 18-24 months or more.
FY25 was focused on growth and capability building. The year was critical for building resilience, and the fruits of this will be seen this year and beyond.
The revenue share of exports is expected to ramp up in the future.
The company announced two large MoUs this year (₹250 cr in TN and ₹510 cr in KA). Both are currently in the land acquisition phase. Once completed, they will form a strong base for the company for 5-6 years. There are central and state level subsidies available, and ASM is looking to leverage these subsidies wherever possible.
Currently, the manufacturing plants are operating at an 80-85% capacity. The larger plants are expected to come online in 18-24 months.
Similar to previous years, we were told that NDAs are in place which limit what can be said about equipment sales and client names.
Currently the staff breakdown is as follows: 2/3 ER&D, and 1/3 DLM. DLM is expected to grow. ASM intends to use the ER&D staff as a strategic pool of talent/value to assist with DLM efforts. ER&D is not solely an external client facing division.
ASM is working on internal IP efforts, and will update shareholders in the coming months. Currently IP is customer owned. I am keenly interested to know what internal IP the company will develop.
Bear in mind that semiconductor grade equipment requires much more skill and precision than equipment for the solar industry, so the company aggressively pursuing opportunities in the solar domain is great news. Progress here will serve as a foundation to then sharpen its skills and precision engineering prowess, which will then pay dividends when doing more work for the semiconductor industry. On this note, there are 3-4 very large names in the solar industry, and ASM-HHV is having discussions with two large players.
Semiconductor processing involves many complicated processes, and I was curious to know whether the company was doing any work with photolithography (arguably the most complicated process). The company isn’t there yet, but is open to actively work with customers on this technology (a sign of confidence in their skills).
Overall, I am happy to stay invested and see things play out.
Disclosure of holding: I kept buying shares in ASM Technologies from 2021 to 2023, with an overall cost basis of ₹227. I have a fairly concentrated portfolio and do not own more than 10 companies at any given time.
Excellent note and detailed analysis Ankit @ankit_george.
Great help.
Good afternoon everyone,
Sharing some rough notes from the first earnings call (in my memory) for ASM Technologies below.
Broadly in two segments – HiTech and Engineering
HiTech (the segment I am the most interested in) includes design, prototyping, qualification and manufacturing of systems, subsystems, and precision parts for the solar, semiconductor, consumer electronics and industrial electronics sectors. India is becoming a preferred design and to an extent a manufacturing hub. Targetting OEMs looking to set up high value add manufacturing capabilities in India.
ASM-HHV revenue is expected to grow in the second half of the year.
Investments in infrastructure, people and capacity are ongoing.
Revenue was 63% from DLM, then 37% from ER&D. ₹11 cr capex so far in this FY. ₹77 cr net cash position. Expecting growth to continue this year.
₹30-35 cr capex in H2. Can increase if land allotment work for large new facilities is fast-tracked.
ER&D is being used as an internal resource to advance DLM efforts. DLM will continue to be the focus. While services revenue appears to be lumpy, expect to see growth here in the coming quarters.
Could get up to 50% of capex (for machinery) taken care of by the Centre (up to 25%), and the State (up to 25%) for the larger plants that are being planned.
We have at least an 18-month visibility on revenue due to the nature of our work. This is why we’re confident about continued growth. But we will not be giving forward looking guidance figures.
Capacity utilization at 80-85%. A new facility is being commissioned, and it will be ready as early as late December. This is not part of the larger MoUs, as setting up these facilities will take more time.
There will be revenue potential at each stage of construction of the large facilities (expecting three phases).
Titan Engineering and Automation Limited – a potential competitor – has a lot more to depict on its website. Feedback received, and ASM will work to better communicate its offerings.
~60% of our revenue is from top 10 customers for the overall business. There are customers for whom we do both DLM and ER&D work.
Ended on a very positive note. Talked about exciting times ahead of the company. The tone was the most bullish that I have ever heard from the management.
Sharing a financial performance snippet below as well
Hello. Thanks for very details shared. Just wanted to understand how is this company different from regular ESDM players like say Kaynes, Dixon, Aimtron etc. They are also talking about DLM. Does this company manufacture on scale/volumes or just the protype of designs they conceive.? Broadly could not understand what does the company actually do which most other palyers are not able to do. If you can explain in not so technical language it would be great.
This entire electronics and semiconductor industry is in flux, and continuosly evolving, but I will try to keep it simple.
Kaynes, Dixon, Aimtron, etc., are more of ESDM (electronic system design and manufacturing) players, which means the following… If a company that sells electronics items (whether it’s a washing machine, or a cell phone, or anything in between) contacts them for help, these companies do the following:
With ASM, this is what they do (very high level)
I do not know if my language above was easy to follow for a non-technical person, but I hope that it helps
Thanks a lot. That was pretty well explained in layman’s language. To be fair, product line is such that any further simplification is not possible. I also went through their websites, some blogs and their products applications to a get a sense of what they do. Still trying to get more clarity but initiated a small position.
Hello All,
This company came into my radar recently due to the tremendous YOY growth in Q1/Q2 shown. I have gone through the thread and overall the company seems to be operating in a niche area and I am impressed by threir transition from an asset-light service model to a high-value manufacturing model that I am still trying to understand better
I have a few queries though on the Financial Books to understand the risk better :
The company was able to pivot to DLM and is also generating great revenue but the Fixed Asset TO still remains same around 6 or 6.25 . Wont this sift to DLM actually should mean that company will have spend more on PPE and Fixed Asset TO should have come down ? Atleast the numbers suggest it doesnt look like so hence wanted an opinion as the company is no longer an Engineering Services company and more of a DLM company now
Consolidated CFO to PAT (or EBIDTA) ratio : Over the last 5 years consolidated ratio looks poor at 33% and last two years looks worse ? The equation can balance up if I consider the Trade Recievable but then that creates another question.
Quality of Trade Recievables : As per AR 25, Receivables-to-Revenue ratio stands at 44% and there is also Unbilled Revenue at INR 38.30 Crore for 2025 . The Below table explains the overal scenario. So close to 30% unbilled and 7% > 12 Mths doesnt give me a comfort especially if I look at CFO situation in conjunction. Is the company too aggressive in Revenue recognition ?
| Ageing Bucket | Amount (INR Cr) | % of Trade Recievable |
|---|---|---|
| Less than 6 Months | 75.78 | 58% |
| Less than 12 Months | 6.64 | 5% |
| > 12 Mths | 8.93 | 7% |
| Unbilled Rev | 38.3 | 30% |
| Total Trade Recievable | 129.65 | 100% |
The answer to the above queries will really help me to understand the company better
PS : I am still evaluating the company and currently do not own this stock. Pls do not consider the above as a buy or sell recommednation
@ankit_george bhai - any views on the latest results? numbers looks like bit disappointing.
Thanks in advance for your views.
Happy to chime in.
I am not happy with the results, to be honest, but I see them as a blip in a long term journey.
From Q4FY25, we have seen a step change in consolidated quarterly revenue, from 50-60 cr to over 100 cr. Comparing Q3FY26 to Q3FY25, I am still satisfied to see a near 80% jump in revenue.
The company has two major capex investments of 250 cr in Tamil Nadu and 510 cr in Karnataka. Assuming land acquistion has been completed, the new facilities should be completed over 24 months, and I would think that production would scale up slowly over the course of construction (not suddenly at the end of the 24 months).
So, have a look at these numbers, assume whatever number you want for asset turns (net sales/capex), and then decide for yourself if revenue is going to accelerate from this point forward.
Also, with Vietnam as an emerging manufacturing powerhouse, I am pleased to see that the company set up a wholly owned subsidiary there.
So, once again, I just see the current numbers as a blip in a long-term journey.
Disclosure of holding: I kept buying shares in ASM Technologies from 2021 to 2023, with an overall cost basis of ₹227. I have a fairly concentrated portfolio and do not own more than 10 companies at any given time.
