Krishca Ltd : A SME offering steel strapping Solution

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Another interesting angle to consider is defense contracts. It might seem like a long shot, but think about it militaries, including the Indian Army, must have substantial logistics needs, particularly when it comes to transporting heavy ammunition and large quantities of supplies. Steel strapping could be essential for securing these loads.

It might be worth asking Bala in the next conference call whether the Indian Army puts out tenders for such packaging contracts. If they do, this could open up a significant opportunity, not just in India but potentially for supplying the U.S. military in Bahrain as well.

Sure, it’s a bit of a gamble, but it’s worth exploring.

Long shot !

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On the demand from Defence, dont see any prospects. I have some idea on how it works.

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Can you elaborate please?

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Ammo is containarised and stks are distributed, consumption is low, no quick replacements i.e demand is lumpy and supply is short…all in all, not a volume play, the need here to make it an interesting place to be in.

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Thanx I know very little about this , that’s why I said - long shot.

Also if Krishca’s focus is more on the domestic market rather than exports, the UAE could be the right spot. It has the most steel plants in the GCC and the largest one in the region too, making it a perfect choice for local operations.

So here is my final guess -

If focus is domestic than - UAE

If focus is exports than - Bahrain/Oman

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The main reason would have been to bring in strategic names, If you read the paper disclosed by the company , 14 CR has been invested by promoters of APL Apollo and there are other prominent names too (Like - Shyam Metalics). This might lead to higher business generation in the company esefically in the packaging domain.

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For APL Apollo this could have been done keeping the requirements of SG Mart in mind, which might require tremendous amount of packaging needs in coming times.

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After Signode, is Waelzholz will be the next target for krishca?

The Waelzholz Group is the global market leader in high-quality cold rolled and heat-treated steel strips and profiles, used as primary products in the automobile industry, the energy sector, and in specialized industrial engineering applications. With over 185 years of experience, Waelzholz currently operates at nine sites in six countries, in Europe, North and South America, as well as Asia (China), and is the global leader in the development of innovative steel strip solutions. It currently has 2,300 employees worldwide and annually produced more than 780,000 metric tons of high-quality cold rolled steel strip and shaped wire at its locations in Europe, North and South America and Asia.

Another company, Theis Precision Steel India Pvt. Ltd. pioneered the specialty cold rolling of high / medium carbon steels in India. Today, it is a leading specialty cold rolled steel strips manufacturer in the country. It also is the only manufacturer of precision hot rolled solid steel profile sections. It is an associate company of Friedr. Gustav Theis Kaltwalzwerke Gmbh, Germany. The Cold Rolling Division, established in 1968, pioneered in India cold rolling of stainless steel and later focused on cold rolling of narrow width strips in mild, medium and high carbon and low alloy steels. The division produces in thickness range from 0.07mm to 3.2mm and a width range from 6mm to 460mm. It has a manufacturing capacity of 40,000M.T. per annum.The Profiles Division, established in 1997 has a manufacturing capacity of 6000M.T. of custom made solid profiles/sections in various grades of steel.
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Now, the Waelzholz Group has taken over the Friedr. Gustav Theis Kaltwalzwerke GmbH.

It looks like Krishca entered in the production of these value-added products.

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In addition, Krishca is also going to set up a production line for cold rolled steel strips and related products.

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Source: -
https://x.com/ias_summit/status/1826917170669912527

disclosure;- invested.

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Investing Accelerator Summit 2024 | Idea Presentation |
Krishca Strapping

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Few takeaways from Annual Report(2023-24) of Krishca.

Strategic Facility Expansion
& Future Growth Initiatives :-

New Hardening and Tempering
Line in Tamil Nadu
The company has launched a new
hardening and tempering line in Tamil
Nadu, marking a significant expansion in
production capacity. This development
allows the company to enter new
markets with its Ultra High Tensile
Strapping, a product in high demand
across various industrial sectors.

Entry into the Welding
Consumables Market
The company is set to enter the welding
consumables market by establishing
a new subsidiary and constructing a
MIG welding wire production plant in
Chennai. This facility will serve both
domestic and international markets,
reinforcing Krishca’s commitment to
diversifying its product portfolio and
expanding its global footprint.

Strategic Investment in
the Middle East
As part of its global expansion strategy,
Company is making significant
investments in the Middle East. The
company is establishing new sales
offices, warehouses, and a state-of-theart manufacturing plant in the region,
providing a strategic gateway to the
lucrative US market.

Focus on India’s Steel
Packaging Market
Recognizing the potential of India’s steel
packaging market, which is valued at
₹ 2000-2500 crore annually, Krishca is
intensifying its focus on this sector. The
company aims to secure a significant
share by forming strategic partnerships
with major packaging contractors who
manage the packaging needs of steel
mills.

Our ambition is to become India’s largest steel strapping supplier and packaging contractor. We aim to achieve operational independence through our in-house cold rolling mill, ensuring quality control and raw material procurement.

Leveraging our deep expertise in steel strapping, we have strategically implemented forward integration by expanding into packaging contracts. Packaging Contract in Pipeline worth ₹ 200 Cr with Expected 20% Convergence Rate.

Our strategic objective is to increase our packaging contract revenue to more than 50% of our total revenue in the coming years. By actively securing new contracts and expanding our market presence both domestically and internationally, we are well-positioned to achieve this ambitious target.

With Indian steel exports on the rise, there is a growing demand for steel strapping, a market where Company is well-positioned to excel. Global importers of steel strapping are increasingly seeking non-China suppliers, offering Krishca an opportunity to capture a larger share of the global market.

We are actively exploring opportunities in new markets such as Bangladesh, Sri Lanka, Australia, the US, Europe, and Africa. Our focus is on increasing our packaging contract revenue and capturing a larger share of the steel strapping market. By appointing distributors in these regions, we aim to enhance our market reach and drive export growth. These initiatives are aligned with our goal of becoming a dominant player in the global packaging industry.

Supportive government policies and initiatives aimed at boosting the manufacturing and logistics sectors can benefit Krishca. Incentives for domestic production and export promotion can enhance profitability and drive business growth.

Planning to increase in borrowing limits from Rs.50 crores to Rs.200 Cr or the aggregate of the paid up capital and free reserves of the Company, whichever is higher.

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It seems like the stars are perfectly aligned for Krishca Strapping’s success !!!

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Can anyone please share their view if and by what quantum will be crash in absolute ebitda for the company in case of crashing steel prices.

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Management’s reply regarding this question in last concall

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Smart way of risk mitigation.

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If you want to see what Krishca could look like in 10-20 years, the product areas they might expand into, and how big the market opportunities are, just explore this website: https://www.crowncork.com/. Crown Holdings is a US-listed company with $12 billion in revenue and is the parent company of SIGNODE. Check out what interesting things they’re doing.
There seems to be a common theme in all product verticals i.e. it’s a consumable.

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Another Indian Company that’s doing very good, I recently met them in Packaging Expo - https://mvsips.com/

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FY-23 Numbers

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Hello Rocket !
I am still studying Krishca. while its interesting i am yet to invest .
I’d like to understand comparison of Krishka to Crown & Signode with respect to market size.
Crown is a giant in packaging…it mostly does metal cans…beverage(let say all types of food grade tin cans)
Its subsidiary Signode does packaging of many types(Corrugated (containers), Stretchfilm (wrapping),jumbobags(plastics containers),steel straps (wrapping).

My understanding with containers demand is …there existists large market in terms of colume requirements. on the otherhand the wrapping volumes(all type of wrapping plastic as well as metal) are lesser compared to containers.

are you saying krishca could/plans also get into the tin container packaging business ? i find the market size to be large of tin containers if krishca is able export…however i would like to know more if krishca can also enter into other type of packaging business which Signode does.

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Steel strapping is a good start , once you start making some money you will look for newer verticals to add.
So from Steel Straps to Strapping Contracts to Packing Contracts to Specialty Steel division to Welding consumable and so on…
Looking at Crown one can visualize what kind of newer verticals one can add.
Krishca’s edge is it’s manufacturing , once you start dealing with specialty steel & high precision steel products, all these verticals open up , now it’s up to management to decide which vertical to enter and when Currently focus is on strapping & packing business only.

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I dont think management is thinking about it as of now…since they have lot to do in steel strapping and packaging itself…