Meson Valves : ‘Make in India’ player
A quick Google search : ‘Ship valve manufacturer in world’
Meson’s name comes 4th ( sometimes 6th) but, always features in the first page.
During the defence expo 2024 in Pune, I happened to meet Mr. Kishor Makvan, Executive Director
handling operations at Meson valves. I was surprised to find the Naval chief Mr. R Hari Kumar having a 20min. discussion on the second day of the expo.
I waited for the chief to go and then had a word with Kishorji. Since I hail from an instrumentation background and having
worked with a refinery two decades back I discussed the technicalities of valves. Naval vessels require non-ferrous valves for which Meson has expertise.
This company was incorporated in 2016, the company was ‘Sander Meson India Private Limited’ and the assembly line was
started in Goa.
In 2019 the name was changed to ‘Meson Valves Private Limited’ and in 2023 it was
changed to ‘Meson Valves Limited’.
In a very short time they received ISO 14001:2015 , ISO 9001: 2015 and ISO 45001:2018 . From 2022 onwards, they have moved their assembly line
to Chakan MIDC, Pune.
Meson had raised Rs 11Cr for Plant and Machinery, 11Cr. for general working capital when their IPO came in Sep. 2023. They have bought 3 machines from Jyoti CNC and
Sheetal Lathe machines and some other CNC machines are about to be delivered from Jyoti this year.
Moat:
a. TYPE approval: These guys have got TYPE approval, meaning that certain valves dont need repeat inspection / testing so the delivery is faster.
Testing / inspection process is time consuming and involves multiple parties including defence personnel
as well.
b. Ability to pass on costs to raw materials:
Since they are specialised into manufacturing of non-ferrous valves the raw material price may fluctuate due to the current geopolitical scenarios.
Their customer also acknowledges this and hence they are able to pass on
the price to the customer since they have limited competition in the segment they operate.
c. Backward integration with foundries:
Since the Meson team is experienced with the entire process and workflow of valve manufacturing/ assembling, they have experienced that margins can
be significantly improved if backward integration is done with foundry.
They are in advanced stages of having a fully functional backward integrated site at their current location in Pune, which would help them in faster and efficient delivery to their clients.
testing and
inspection
d. Spares business
This is a ‘no brainer’ considering that the entire ‘valve ecosystem’ needs a lot of parts in order to be in working condition. Meson is in a good condition
to source the spares in a good quantity.
Competitors
L & T valves, Malhar, DelValves and GDPA.
Meson is a dominant player in Hull and triple offset valves owing to the teams’ technical expertise in this field since 19 years.
For Meson, the testing and inspection on time is
not that tough it seems because of its location in the Dehu cantonment area. Armed forces since the last five years are working like a private company much alike the previous years and even they understand the criticality of on-time inspection and testing for timely delivery of
components. Meson being in Pune, can source a lot of valve components like actuators and from other players. These sourced products are low margin products so manufacturing them doesnot make sense. akin to Maruti not manufacturing tyres,seats etc.
That makes their delivery faster so that they can focus only on what they are specialized in. They don’t need to pay any royalty to their parent company. Meson’s global presence has opened doors for them to do business worldwide where due to the current geopolitical
instability, more defence vessels are being ordered.
The R&D done at their Pune centre gives them an edge over their competitors to build niche and valves for submarines and defence ships.
they have exclusive contracts with foundries with whom they work.
This makes it difficult for any other vendor to give finished components matching Meson’s quality
Future Business lines:
a. Waste Water Treatment
Management has extensive experience in water treatment
Especially for defence premises, there is space for specific vendors who do water treatment and create solutions for challenges face by the military for water
availability at critical locations
Meson valves is exploring various solutions on waste water treatment and working on possible ToT to explore this space
water treatment and hopefully something positive should come in the coming months, as per their sales team estimates.
Order visibility:
Almost all the major PSU shipyards have significant defence vessel orders from the Govt. of India for the next 4-5 years. And looking at the Geopolitical situation and need of Indian Navy, the demand for Naval ships will increase, with good focus on
exports of naval ships.
Vessel costs vary from over 100 cr to sometimes 20000 cr depending on complexity of the ship.
Meson valves with high quality, certification, and high end technology combined with possible Value added services in Valves , has a very good chance to
bag critical and major orders, for which the delivery time could be between 1 - 3 years and this time would ultimately decrease as they do backward integration.
Their focus is also to integrate valve related components like actuators, filters etc for better service to end user.
Aircrafts
For aircrafts, they are developing certain critical valves for which R&D is currently is going on
Location benefit:
Being in Pune, they can source a
lot of valve components like actuators and from other players to make delivery faster.
Chakan MIDC starts with the defence area of Dehu area where Munition India and Ordnance depot is located.
‘Defence’ is in the air as one enters the MIDC area.
Value added services:
Meson is planning to provide Value added services in a partnership with
NIBE Ltd. These two companies are located at a distance of just 5Km from each other. A greenfield vessel production requires a lot of manpower
The shipyards need to complete defence vessels on time for
which they have a limited number of contractors.
Meson plans to work at the site providing value added services for a defence vessel on piping systems along with the valves. This is a different category of the business for which the potential is huge and they have seen a
positive mindset of the yards in this business aspect.
There are a lot of components in a defence vessel which are ‘plug and play’. Meson team prepared a solution for those components and given to the yards for the approval so that a vessel delivery can be made faster
Financials:
The current financial figure for H2 may surprise the investors.
Current visit’s purpose was only to do the due diligence of the work they do
As per my assessment, Meson’s promoters are more than capable to scale the company to newer heights.
My views can be biased. I am not a SEBI RA.
Attached below is the video of the Meson facility.
