I fully concur with the findings of @raj1968 @Chandragupta @Marathondreams.
I just wanted to add few points, The Company operates in a tier 2 city unlike Sansera which is Bangalore. The Company might not be having all the employees working throughout the year , better metric would be actual Man hours/total wages paid when you have large number of contractors. And as already pointed out be others they do good amount of outsourcing so costs would be moved to job charges from employee expenses. Also When companies grow from a small base with very high rates in top-line , its a bit hard to work on these metrics unless we get the current data from management.
Sorry if I didnât add much value on this aspect.
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The company projects to be in a niche business ( aspiring as well as current), itâs not plausible to have contract workers doing singnificant work. If contact workers are in small town and ad-hoc then i have difficulty in thinking about the skills required to do the job. A niche business in this area shall have lower material cost and higher manufacturing / employee cost. While forging in itself is not niche, what moves the needle is machining and if these guys are actually going to do what they are alluding to, they would be planning to get into a lot of machining, Which is not that easy to execute for a company of such size.
The company has done recent ipo and for many many companies margin goes down after few quarters. I am not alluding to such behaviour in this case but it could be.
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Video from Oct 24
Sharing to track history
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Can you please tell me where u get this screenshot ? Is it DRHP or what ?
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Itâs from page number 56 from their 2025 Annual Report. The link to the Annual Report is here
As per Promoters earlier commitment, land has been acquired for the large plant to consolidate the current fragmented 4-5 factories.
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Machining is not easy to execute for a company of this size yet OBSC has done a commendable job in executing these machining parts hence the premium given by the street.
Having visited their Chennai and Pune plants personally- All they do is machining largely. The DNA is machining. Machining is a utilization and efficiency game which is driven by skilled operators for sure but the real skillset is at the production incharge levels running the shop floor not the person pushing buttons on the CNC. Regarding contract workers- a lot of machining is done for Auto parts which isnât as complex as whatâs required for Defence, Marine and Aerospace parts. Itâs hard to bifurcate how many contractual workers exist for which vertical hence any assumption both positive or negative is bound to be a shot in the dark only.
They make Auto parts, Defence Parts, Aerospace Parts, Marine Parts, Medical Implants (In progress). Niche is what we can call maybe Defence, Marine, Aerospace etc- For Marine they have indicated theyâll be doing 40-50 pct Gross margins- That answers your lower material cost question.
Hope it was helpful to some extent.
Disc: Not invested
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