Sir, If we talk about the valuations of these two companies Modern insulator and HIIL and as we can see demand of their products getting increasing day by day seems they have run a lot specially modern looks bit expensive if we consider the 100% capacity utilization and comparing their last Q revenue.
Considering the geopolitical havoc that has been going around since Feb 2026, I was wondering how it will affect the company.
MIL has mentioned that they effectively mitigate cost inflations by embedding price pass-through (escalation) clauses in most of its contracts, successfully passing the increased input and freight costs directly to its customers.
Also as of FY25, the revenue mix is roughly 52% domestic and 48% international. I was not able to find specific mix for USA, Europe, Middle East and other geographies. They do mention that MIL exports to over 50 to 75 countries globally, with a strong presence in highly competitive markets such as the USA, Europe, Latin America, Africa, and West Asia (Gulf region).
Gulf is a major growth driver for the company. Robust export demand has been fueled by large orders for premium room temperature vulcanizing (RTV)-coated insulators from state utilities and EPC clients in West Asia. The company recently obtained clearance from a major Gulf utility and won a significant order for RTV-coated porcelain long rod insulators. (Modern Insulators Ltd Management Discussions | India Infoline)
The blockade started on 28th feb 2026, even if they pass on the freight fluctuation to their customers, what good is that if their shipments can’t reach them. Results will tell how things go.
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Result is out. Good set of numbers. Company is not affected by Gulf war. It is good to see demand is there though export has been affected. When others are affected, how this small company is able to maintain its position is really commendable. One thing that came to light is they are expanding by taking over another company where they have extended almost 70 cr advance. Details could not get. Maybe @ Rocketman can enlighten us.
Invested small portion of my PF, so biased.
@ha_the_meow Can tell more about it, I am not very actively tracking Modern.
Hi Prabhat, based on data published in their report today, actually their insulator business has done better QoQ and YoY . Revenue growth and margin improvement. They are also doing capex in insulators continously in insulator business meaning growth can keep coming.
Main issue here, is tarry towel business which they must demerge as it is now loss making business. If they annouce demerger, stock can fly.
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I did some QoQ comparison, I believe modern insulator is working at 100% capacity utilization, where as hindhustan might have given up some OPM to get that extra revenue or war related. Thats something only management can tell. What I don’t understand is modern working at 100% capacity at lower margins then its peer. Usually, companies when can’t take any more orders in terms of volume, they can give up low value order and focus on high margin orders (which we know they MIL did, check the quotes below). Modern also has the cost passing on clause in their contract, even then they are not able to increase margins. In absolute terms the margin difference is huge between the two companies, in both quarters.
(q3 mcap is of the date i wrote the data for the first time. in mcap to sales, sales is quarterly sales)
Modern clearly has better quality and time-tested products yet it has lesser OPM then its peer. I know they can’t increase their volumes until they are done with capex, but in terms of margins I am a bit underwhelmed.
The reason for this is corporate governance.
I cannot elaborate more on public forum because I haven’t verified it myself, though it’s a well known fact in the industry that company under reports it’s numbers.
Your analysis reverberates this observation.
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Recently learned that the margins you’re seeing for porcelain insulator companies today are based on orders received a year ago. Prices have increased by more than 50% again over the last 12 months, so the orders being received today will likely show up in margins a year from now.
This is about the industry.
Now actual margins will depend on product mix and intent of each company.
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It is unfortunate that both the leading companies in the sector, Modern and Hindusthan insulators don’t give any information on the developments. Neither does Grasim. I can not understand their logic. Particularly peeved against the management of Modern. Don’t they want to show their company as transparent and investor friendly? If not then why are not they taking the Company private?
These are legacy units run by legacy management teams, so changing the mindset will take time.
That said, I’m in touch with a few people who are in communication with the management on this issue.
Let’s see what happens.
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QPower just bought Porcelain insulator maker Winwin Speciality Insulators Ltd. Adds capability to manufacture ceramic insulators up to 1200 kV (installed capacity of approximately 18,000 MTPA) and polymeric insulators up to 400kV produced to IEC, ANSI and IS standards.
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Where did you get the information? Company is yet to upload it to exchange site.
But it was on the expected line as company has informed during q4 results publication regarding advance paid for acquisition.
Link to press release uploaded yesterday: https://www.bseindia.com/xml-data/corpfiling/AttachLive/005c4cc3-00f0-4bd9-86cf-6ed0e671945a.pdf
Modern or HIIL? I guess they need to do concalls.
HIIL
I think there is lot of value in Modern as well, but modern’s management doesn’t want to meet anyone, few connects are trying, let’s see.
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Like It was alluded to elsewhere, Modern’s management doesn’t seem to be honest enough. Sad for a company in such a tailwind sector.
some insulator excerpts from may concall of MMP-
the domestic market, there is a shortage of porcelain insulator and lead time is of 18 plus months
Deccan and Olectra, they have order books running in over 8 months, 6 to 8 months and it is a very highly technical product. The cycle of converting enquiries into orders itself is 4 to 5 months at times and the quality assurance that people have to provide ensures that the margins remain very healthy and there is a huge entry barrier into this business (polymer insulators)
within India and abroad, the transmission capacity is going up significantly. India especially is in a very, very big expansion phase. So, new capacity coming in, of course, the maintenance and replacement of insulators that is always there. In India, third very big category is the renewable energy players, especially the solar energy players because their footprint has expanded so much in the last 5 years. There is a good capacity, but there is not enough lines to evacuate that capacity out from the states which are very solar energy rich. So, that has become a new basket. But in India, largely the demand is being driven by a lot of new transmission lines coming up.
So the problem is that the Chinese are not validated by the state utilities nor by the power grid corporation of India. What imports we are seeing in India, very little from China are largely for the 11 kV and 33 kV distribution insulators which is not going to be our focus area. I don’t think the Indian government will in the very near future even permit validation of Chinese insulators.
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I did not find any reference to their honesty. Can you clarify on what basis you drew the conclusion?
They under report their income. Many rumours about this. And they haven’t had any investor interactions at all. No clarity on their plans. At least we know HIIL is doubling their capacity although even they aren’t good in investor communication. @RocketMan could add more if he wants.
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That’s what the word on the street is.
Anyways, the cycle is so strong that the market may choose to overlook this for now.
Everyone is free to make their own decision based on their risk-reward assessment.
I am invested in both the porcelain insulator companies.
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