- Losses on forex hedging: 3.54 cr. (vs 3.59 cr. in FY21)
- R&D spends: 80.49 lakhs capitalized, 55.3 lakhs recurring (total: 1.36 cr.)
- Employees: 257
- Increase in management salary: 10.78%
- Increase in other salary (except management): 8.39%
- Share price: 43.2 (low), 104.9 (high)
- Shareholders: 17’182
- Audit fees: 6.35 lakhs (vs 6.47 lakhs in FY21)
- Total tax disputes: 10.25 cr.
- Doubtful receivables: 1.4 cr. (vs 1.1 cr. in FY21)
- Purchased leasehold land worth 6.57 cr.
- Witnessing supplier consolidation from key clients thereby having higher wallet share
- Implemented a new Reward & Recognition scheme to create an environment of Performance Excellence
Related party transaction with Modison Copper:
- Purchase: 27.09 cr. (vs 19.55 cr. in FY21)
- Sale: 4.66 cr. (vs 1.63 cr. in FY21)
Engineering Goods sector constitutes >27%, accounting for largest share of India’s total exports. Growth in engineering goods exports in recent years has largely been due to the zero duty Export Promotion Capital Goods (EPCG) scheme
Company manufactures electrical contacts for switchgear (including Low, Medium, High and Extra High Voltage). Switchgear equipment is used in complex electrical substations to withstand fluctuating operating voltage in highly volatile environmental conditions. The development of new industrial structures, including powerplants for safe and reliable operations, is further estimated to stimulate the growth of the market.
The size of domestic switchgear industry was Rs183bn in FY18 and is growing at a steady pace of 9.3%. The low-voltage (LV) switchgear market (MCBs, DBs and RCCBs) derives demand from both residential and industrial sectors (unlike medium/high voltage segments which are used in industry and power utilities only). Retail sales (residential sector) constitutes more than 50% of the LV switchgear market. The electronics & electrical sector recovered by 27% to 14.9 Million ounces (Moz) (464 tons) last year and, importantly, surpassed 2019 levels.
Within the electrical segment, notable growth was seen in both the high voltage and low voltage (LV) switchgear markets. The former outpaced the latter due to higher demand from state utilities and Central Public Sector Undertakings (CPSUs), which related to expanding their sub-station network after a slowdown last year amid nationwide lockdowns. The easing of the pandemic also meant that LV switchgear installations benefited from rising demand from the real estate and manufacturing sectors
It also produces goods for dominant sectors such as automotive, engineering, aerospace and railways.
Modison has the advantage of developing a wide range of silver contacts for diverse industries. Its plant is amongst the largest single site for High Voltage electrical contact manufacturing globally, thereby enjoying a low-cost advantage.
We have started our capex plan for upgradation of our existing facilities by infra expansion , both green and brown field, procuring automated machinery and robots etc. We also plan to build a new factory at our existing premises for increasing the HV segment assembly line. The said capex involves an outlay of Rs. 25 crores, which will be funded through a mix of internal accruals and debt.
The Board approved the Company’s business expansion plan in Battery Energy Storage System and EV charging Infrastructure. The Company has entered into an MoU with RENERA and LDrive (L-Charge), leaders in Battery Energy Storage System (BESS) and Electric Vehicle (EV) charging infrastructure segments respectively. These expansion plans are currently in feasibility stage
Salt, bullion & other segments:
We manufacture silver nitrate, silver sulphate, and silver oxide under this segment. These are high grade precious metal compounds with diverse applications in industries such as silver plating, pharmaceutical catalysts, mirror manufacture, inedible inks, explosives, fine chemicals, performance chemicals, and silver oxide batteries. We booked first export order for Salt from Indonesia.
We also have a consumer bullion segment where we manufacture and sell silver bars and coins. These are promoted through partnership with the Post Office as well as via leading online websites and distributor network. Our bullion and salt markets segment had a mixed year on account of the lockdowns and prevailing uncertainty
Disclosure: Not invested