Jay Kay Enterprises - Moving into the realm of 3D printing

Many multi-baggers may be born in the future in the field of advanced technology. However, unlike the US market, where a number of listed businesses are engaged in emerging future areas such as Robotic Process Automation, 3D Printing, Genomics, and so on, similar stocks are uncommon in the Indian public space. Let’s take a look at a publicly traded company that appears to be serious about 3D printing. 3D printing is expected to be a game-changing technology that will change the way the world manufactures in the future.

The JK Group
The Singhania family created the JK group in 1918. Dr. Gaur Hari Singhania, based in Kanpur, Shri Hari Shankar Singhania, based in Delhi, and Shri Vijaypat Singhania, based in Mumbai, are the present heads of the family. The three men are cousins who today manage distinct firms with no cross-holdings or common directors and staff, sharing simply their family background. The company we’re talking about is part of the Gaur Hari Singhania group, and the only other listed company in the group is JK Cement, which is now trading with a market capitalization of approximately Rs.17000 Cr. JK Technosoft and JK Cotton are two other unlisted enterprises controlled by this management.

Financials
Currently, the financials are not very impressive.

  • Other income of the company is 99% of the total income. This includes income earned through interests, rents and others. FY 21 has an exceptional other income related to profit on sale of assets for ₹ 16.63 Cr.

Associates

  • JK Cotton Limited:
    Company has more than INR 9 Crores invested in JK Cotton Limited and has 40% equity shares. JK Cotton Limited was manufacturing cotton yarn. Gradually it started manufacturing cotton fabrics and installed a process house.

  • Nebula 3D Services Private Limited:
    Company has more than INR 3 Crores invested in Nebula 3D Services Private Limited and has 28% equity shares. Nebula 3D Services Private Limited have been doing business in 3D printing, designing, scanning and other related business.

New business
Company has entered into a new business of 3D Printing, Designing, Scanning and other related services under the name and style of Nebula 3D Services Private Limited. Company built a workshop in Bengaluru for Tear Down & Benchmarking. The Company also invested in a specialized scanner to take up specialized scanning work.

  • Joint Venture
    Company has entered into a joint venture partnership with Germany’s EOS, a global leader in 3D metal design and printing market.
    The joint venture will operate through a new subsidiary called NeuMesh Labs Pvt Ltd, headquartered at Bengaluru, with EOS providing technical knowledge.

Points To Remember
In the globe, or at least in India, industry is still in its infancy. Though 3D printing holds a lot of promise, technology is rapidly evolving around the world, and disruptions may occur that are beyond our wildest dreams. It will be interesting to see how our businesses adapt this technology for production, but I believe that rising wages and the government’s goal of making India a global manufacturing center will promote speedier adoption of such technologies. JK Group did not plunge into 3D printing technology overnight; in 2018, they purchased a 27 percent investment in Nebula 3D Services, a company that specializes in 3D design, scanning, and modelling.
I believe they have analyzed the potential of this business over the last few years, and their decision to move forward with forward integration is well-considered in light of the future potential. Promoters are significantly increasing their stake, and the joint venture partner’s repute and competence in this industry are further positive points.

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