श्रेष्ठ कभी सस्ता नहीं होता |
सस्ता कभी श्रेष्ठ नहीं होता ||
KAKA INDUSTRIES LTD
(Pvc profile manufacturer)
If you are from gujarat ,you meight have definately seen this advertise of kaka .They are doing huge branding of their products.
Recently, kaka was associate partner for maidaan movie and ajay devgan can be seen branding for kaka .
I have attached video link.
What excites me about Kaka ind.ltd is :
A…It is 300 cr smallcap company growing @30-40% cagr
B…Company has started new big manufacturing plant in village Lasundra, Kheda district (Gujarat) and
C…Company has one year pending order.
How i come to know about this company?
A…I had seen their adds on walls painted with “KAKA”- at number of places in ahmedabad and
B… Kaka delaer shops :
They are present in most areas of ahmedabad .
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About the company
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Kaka industries ltd is leading manufacturer of broad range of PVC section profiles (main product-Pvc door) predominently in gujarat and having presence in other states also.
KAKA’s products find its application in =Pvc Doors,
=Windows,
=Partitions,
=False ceilings,
=Wall paneling,
=Kitchen cabinets &
=Other interior works.
Product wise revenue
58%@pvc
21%@wpc(wood plastic composite)
11%@upvc
8%@roof
State wise revenue
Gujarat (i.e. 63.73%)
Telangana (8.67%)
Maharashtra (7.49%)
Karnataka (4.61%)
Remaining (15.50% )
Before i share details of industry and company, i will share few scruttlebutts from my plant visit, discussion with 5-7 dealers and discussion with employees.
Few scruttlebutts from my side
1…New plant @ Lasundra will become fully functional within 6 months to 1 yr .Uptil now company was unable to match the demand of its products due to constrained capacity.However, with new plant and expanded capacity, kaka ind. will have good growth in revenue and profit for next few yrs
2…Huge dealer network
=I have seen many dealer shops in areas having middle class population .
=In few areas, we can see 3-5 dealer shops within 1 km road strech.
3…It is No 1/No 2 company in gujarat for pvc door industry.
4…Kaka has wide variety of products readily available. So it can supply any product within short time.While in case of other small companies, dealers have to give order first and there is lag period before products are supplied to customer.(for few products)
5…I have visited one recently opened dealer shop where they were not selling only pvc doors but also products of kitchen furniture, false ceiling and interior design and as per him, these products have huge potential in future due to aesthetic look, cost effectiveness ,heat resistance and longetivity
6…Rate of kaka’s product is 10% higher than products from few other companies
7…Promoter is honest and has started from zero.
8…In last 10 yrs, there is huge uptrend for usage of pvc doors instead of wooden doors due to low maintenence, cost factor, asthetic look and resistance to pests.
9…As per one employee, western countries have high usage of pvc doors and india has very low penetration .So india will have tremendous growth opportunity for pvc doors
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PVC DOOR/WINDOW INDUSTRY
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(From greenply annual report)
=Traditionally, in India, people gravitate towards wood or aluminum for making doors for their homes.
=But worldwide, PVC and uPVC doors enjoy great demand as they are widely adopted for making doors, windows and other furniture owing to its durability, functionality and cost-effectiveness.
=The good news is that quite recently PVC and uPVC doors are emerging as popular options in India too. It is said that in the coming years, the PVC / uPVC doors will become one of the fastest growing industries in the country.
Why growth of PVC door industry?
1…Growing awareness about the benefits of UPVC products, rapid urbanization, high migration of working-class population to urban cities, increased personal disposable income, and rise in residential units contributed to the steady growth of this industry.
2…The central government’s initiatives to develop affordable housing for all
3…The announcement of 100 smart cities from the central government, growth in infrastructure due to enormous investment by both governments in India, and the increase in FDI give a clear indication that the UPVC window and door market may get more opportunities and grow at a good rate.
4…Owing to the high compliance of UPVC doors and windows in high-rise buildings and aesthetics properties, they are more likely to emerge as the preferred fenestration choice over conventional aluminum and timber counterparts.
5…In addition, private and public partnership projects to support infrastructure development in rural areas are expected to induce immense potential to the industry size
ADVANTAGES OF PVC
A…LOW MAINTENENCE
=UPVC has low maintenance, yet it is an effective material in making windows and doors.
B…LONGEVITY
=PVC furniture is often more durable and weather-resistant than wooden furniture.
=This longevity means less frequent
replacement, reducing overall consumption and waste.
C…RESISTANCE TO PESTS & DECAY
PVC furniture is not susceptible to pests, rot, or decay, eliminating the need for chemical treatments or preservatives often used in wooden furniture.
D…REDUCED DEFORESTATION
PVC furniture eliminates the need for
cutting down trees to produce wooden furniture. This helps in the conservation of forests, which play a vital role in maintaining biodiversity and mitigating vlimate change
E…RESOURCE CONSERVATION
Pvc is made from readily available raw material.Fewer natural resources are consumed
F…DESIGN FLEXIBILITY
=PVC allows for a wide range of design possibilities, which can lead to innovative and space-saving furniture designs, further enhancing resource efficiency.
=uPVC doors and windows come in various designs, colors, and finishes, allowing for customization to match different architectural styles and personal tastes.
=This versatility makes uPVC products increasingly popular among consumers looking for contemporary and stylish solutions for their homes and offices.
G…REDUCED CARBON FOOTPRINT
=PVC production can have a lower carbon footprint compared to wood processing and transportation, especially when wood
comes from distant sources.
H…RECYCLABILITY
=PVC can be recycled, and some manufacturers offer recycled PVC options.
=Recycling PVC reduces the demand for new PVC production and minimizes waste in landfills.
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Transformation Journey of the company (KAKA IND. LTD)
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Capacity and utilization
2020@7800 MT@61%
2021@11700@61%
2022@15400@55%
2023@15400@55%
2024-2025@New plant
2000
Director Rajesh Gondaliya
started with trading of PVC
profile sheets in Ahmedabad,
Gujarat.
2008
=Started with own manufacturing facility in Odhav Industrial
Estate, Ahmedabad, Gujarat.
=Started supplying to end users directly under brand name KAKA.
=Capacity of merely 350 MT per annum.
2009
=Expanded, started manufacturing facility at Zak GIDC, Gandhinagar.
=Expanded capacity to 1400 MT per annum.
=Started with dealer, distributor model for PVC segment.
2012@expanded capacity to 3000 mt
2014@Started upvc window
2015@WPC Solid Sheet
2019@Incorporated kaka indinustries
=shifted business from propetiorship to company
2020@Started with Gagilapur, Hyderabad to cater demand in South India
2021@Started depot in Surat.
2022@started depot in gaziabad
2023@IPO
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Key strengths
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1…Extensive network of dealers covering major parts of India
=We believe that the growth in our business operations have been made possible by our wide dealer network covering major parts of India.
=We sell our products through a network of 300 dealers spread across over 20 states and Union Territories in India.
=Our sales & distribution network is aided by our capable in-house sales
and marketing team of 16 employees, which liaise with the dealers on a regular basis for customer inputs, market demands as well
as positioning of our products vis-à-vis products of our competitors.
=Maintaining strong relationships with our dealers are essential to our business strategy and to the growth of our business. We continually strive to maintain strong relationships with our dealers in order to have uninterrupted supplies of our products to them and retain them for a long period of time.
2…Wide Range of Products
=Our Company offers over 1200 SKU’s covering PVC Profile, uPVC door & window profile, WPC Profile & sheet in various sizes, specifications and colours.
= We are also engaged in fabrication of factory-made PVC & Solid PVC doors.
=Within each product category, we have multiple SKUs in terms of grades, pack sizes for various applications thereby enabling us to meet
the needs of diverse customer base.
=Having a wide portfolio
of product categories enables us to cross-sell to a large customer base (which, in our case, are majorly dealers) who in-turn reach
out to large number of retail counters for serving the fabricators and eventually end-consumer.
3…Stringent quality control mechanism ensuring standardized product quality
=We employ an extensive and stringent quality control mechanism during the manufacturing of all our profile products
= Our manufacturing facility has personnel responsible for monitoring the parameters of equipment,
stability of materials, reporting any irregularities in the manufacturing process and making adjustments accordingly. These levels
of quality checks ensure maintenance of our brand value for quality of products.
=Our manufacturing facility has accreditations such as
- ISO 9001:2015 for quality management system,
-ISO 45001:2018 for occupational
health and safety management systems,
-ISO 14001:2015 for environmental management system.
=These certifications provide assurance to our domestic as well as overseas customers for the quality and durability of our products.
=We believe that our focus on quality of products has enabled us to sustain and grow our business model to benefit our customers.
4…In-house Manufacturing capabilities
=The in-house manufacturing operations enable us to
stream line inventory management and production process resulting into -maintenance of high-quality
-minimizing production time and -bringing cost effectiveness.
5… Synergy of young and experienced management team with a committed employee base
=We benefit extensively from the leadership of our Promoter, Mr. Rajesh Dhirubhai Gondaliya, who has more than 20 years of experience in the field of PVC profile and related products and has sound knowledge of the polymer extrusion industry. He is
involved in the day-to-day business and management of our Company.
= In addition, Mr. Bhavin Rajeshbhai Gondaliya, Whole Time
Director, who joined the business in 2019, has 4 years of experience in this industry and plays a key role in introducing new product
categories and expanding dealers’ network across the country while continuing to strengthen the brand “Kaka” in India.
=We are backed by a synergized crew of experienced and young support team which has been built up over the years and has been
contributory in achieving the goals of our Company
6 …Brand creation
= The advertisement & marketing expenses incurred by our Company in Fiscal
2021@97.25 Lakhs
2022 @136.70 Lakhs
2023 @259.38Lakhs
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FUTURE GROWTH
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1…Strengthen our brand image
=We have consistently allocated significant resources to establish and strengthen the “Kaka” brand and increase our brand recall
through various marketing initiatives.
=In concord with our endeavor to promote and increase sales, we sell our products under brand
names i.e. Kaka, Poly Plast, Jinwin, Nice Plast and Barbarika.
=As a part of our marketing strategy, we employ various marketing
techniques such as TV Ad on regional channels, participation in trade fairs & exhibitions, presence over B2B marketplace (such as
tradeindia.com), etc.
=We have also recently carried advertisement in the cricket match stadium of Rajkot, Gujarat, during the match between India v/s South Africa.
=Our Company also organizes dealer meets from time to time in order to promote our sales.
= Going forward, our Company will strive to further bolster its brand image by undertaking
marketing initiatives which will not only increase the visibility in the market but also create a strong brand recall.
=Further, as we look to expand our consumer base, we intend to have additional sales and marketing team focused primarily on penetrating the untapped market.
2…Setup of new integrated manufacturing facility @27 cr
=We are currently in process of setting up a new manufacturing plant in village Lasundra, Kheda district (Gujarat), in order to increase
our manufacturing capabilities
=The plant & machinery at the facility
under expansion is targeted to be more automated to reduce human intervention and thus decreasing the scope of human error. We
believe that the entire activity will lead to higher efficiency and production output.
=The land on which the said plant is being constructed comprises of over 49,000 sq. mtrs. area and is
obtained by us on lease from our Promoter Director, Mr. Bhavin Rajeshbhai Gondaliya for a period of 30 years.
=The total cost for setting up new manufacturing plant is estimated to be ₹ 27 crores.
=In order to finance the said project, we have been sanctioned a term loan of ₹ 20 crores from SIDBI. Further, the remaining cost is expected to be funded from the promoter’s contribution and/or any other source as may deem fit by the Board of Directors.
=We intend to gradually shift our existing manufacturing operations
(phase-wise) from the existing three facilities to the aforementioned new facility in the future.
3…Expand our domestic presence in existing and new markets
=Our Company has constantly expanded the dealers network across the country and this continues to be one of the core strategies of
the Company to further expand the dealers network.
=Having a wider product portfolio provides confidence to new dealers to engage with our Company.
=While we believe in growing the dealers network, proper area marking and financial credibility check is done
before appointing a dealer to ensure a good service and reputation in the market without hurting our existing channel.
= Going forward we intend to focus on current markets to increase our customer base and to tap new market and increase our geographical reach and customer base
4…Focus on consistently meeting quality standard
5…Maintaining cordial relationship with our Suppliers, Customer and employees
=We believe in maintaining good relationship with our suppliers, customers and employees which are the most important factor to
keep our Company growing.
=Our dedicated and focused approach and efficient and timely delivery of products has helped us build
strong relationships with our existing customers over a number of years.
= Further, we believe that establishing strong, mutually beneficial long-term relationships with strategic suppliers is a critical step in improving performance across the supply chain,
generating greater cost efficiency and enabling the business to grow and develop
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Key Risks
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1…Huge competition
=The PVC profile industry is extremely competitive where the key factors of competition primarily comprise of product quality, cost, delivery, development and management.
=In this highly competitive industry, company compete with other PVC Profile manufacturers and
suppliers in the world and in India. Some of competitors have better penetration in some of the geographical locations that we
operate in.
=We believe that our
-cost effective and
-integrated facility,
-customer satisfaction
-reliability and
-quality consciousness
provides us with competitive advantage in many of our products.
=While these factors are key
parameters the in-client’s decisions matrix in purchasing goods; product range, product quality and product price is often the deciding factor in most of the deals.
=Some of our significant competitors in the organized segment includes -Dhabriya Polywood Limited,
-Sintex Plastics Technology Limited
-Fenesta Building Systems - (A division of DCM Shriram Limited).
2…Low entry barrier
=This business is low entry barrier.
=However, new company require to manufacture and maintain wide variety of products readily available
=Product range, product quality product price ,extendive dealer network and 20 yrs experience of promoters give edge to kaka ind. over other companies.
3…Geography concentration
=Compny has 63% revenue from Gujarat only
=For future growth, they need to replicate their business model in other states too.
Disclosure: Invested
Disclaimer: This is not a recommendation and anyone contemplating buying or selling should do their own diligence or take advice of their financial advisor.
