Perfect Infraengineers - Using Sun's Heat to Cool!

Perfect Infraengineers
CMP-27
MCap-Rs.-20.82Cr.
NSE-SME Listed Company
Lot size- 6000 shares
Shareholding: as per AR 2016-17
Promoters-5053172(65.55%)
Public - 2656236 (34.45%) Among this 8.09% is held by Venture Capital Funds
Promoters holding has increased during FY 2016-17 by 0.24%
As per 30.06.2017 promoter holding increased to 65.62%
Innovative product - Perfect SunTrac Hybrid Thermal System (Trials completed, commercial launching expected). A system to save electricity in AC systems
NIMESH MEHTA started Perfect Engineering, a Proprietary firm in 1992 which taken over as Perfect Aircon Engineering Pvt. Ltd. In May 1996 with employees strength of 20 people then, it is now 300 employees all over India.
About the Company
Perfect Infraengineers is engaged in the business of Mechanical, electrical and plumbing (MEP) turnkey project contracting & engineering. It is also engaged in the manufacture of Heating, Ventilation, and Air Conditioning (HVAC) components and equipment including control panels. It has a vintage of 15 years, having started with hiring and servicing of air conditioning and refrigeration (AC & R) units. It has grown over the years and now has a team of 250 well trained technician & engineers with 5,000 machines Service Contract. It has successfully completed prestigious HVAC /MEP projects all over India and abroad.
Heating, Ventilating, and Air Conditioning (HVAC) relates to systems that perform processes designed to regulate the air conditions within buildings for the comfort and safety of occupants or for commercial and industrial processes or for storage of goods. HVAC systems condition and move air to desired areas of an indoor environment to create and maintain desirable temperature, humidity, ventilation and air purity.
Depending on geographic location and building construction, various types of interior climate control systems help ensure that interior spaces are maintained at comfortable levels year-round. With today’s energy conservation concerns, buildings are constructed to be much tighter, reducing the level of natural exchange between indoor and outdoor air. As a result, more and more buildings rely on mechanical conditioning and distribution systems for managing air.
Mechanical, electrical, and plumbing services (MEP) are a significant component of the construction supply chain. MEP design is critical for design decision-making, accurate documentation, performance and cost-estimating, construction planning, managing and operating the resulting facility. The MEP sector is evolving and today includes an integrated service delivery pattern, which encompasses everything from design and procurement through to supply, installation, integration, testing and commissioning. In addition, the focus of MEP services are also shifting to encompass operation and maintenance.
The MEP activities provided by Perfect Infraengineers include design, engineering, supply, installation and commissioning of HVAC, plumbing, firefighting and electrical systems to a wide range of industrial, commercial, hospital and tower projects. Its solution includes turnkey electro mechanical works starting from the engineering design, value engineering, construction management, erection, testing, commissioning, operation and maintenance.
Other services-Rental Service
Perfect Infraengineers Ltd also provides solutions to the customers who do not wish to make a capital investment, by providing the air-conditioners on lease / hire basis. In past 2 years we have leased out more than 1500 air conditioners of varying tonnage to various companies.
As planned earlier, it has become one of our major revenue streams. Perfect Infraengineers sees a great growth in this area too and preparing ourselves for upcoming demand from the market. This is also increasing asset base of the company.
Control Panel Manufacturing
100% Subsidiary of Pefectinfra Engineers Ltd.

PROSPECTS

Perfect Infraengineers Limited (Perfect) signs a License, Development and Supply Agreement with SunTrac Solar Manufacturing LLC (SunTrac), a Wyoming Limited Liability company having its principal office at Arizona, USA. SunTrac has developed a proprietary solar thermal technology that integrates with heating, ventilation and air conditioning (HVAC) and refrigeration devices reducing compressor electricity consumption by up to 40% and posses U.S. patent for the technology.The agreement grants ‘Perfect’ an exclusive non transferable right & licenses under the SunTrac IPR to exploit SunTrac products which has been modified or customized by ‘Perfect’ using any
SunTrac proprietary components for commercial sales to its customers. The agreement also grants ‘Perfect’ an exclusive non transferable royalty free right and license to use SunTrac’s proprietary Trademarks and also an exclusive non transferable right and limited licenses toSunTrac’s licensed software.
The said collaboration paves the way to introduce ‘Perfect SunTrac Hybrid Thermal System’ with smart solar panel in India for a revolutionary, cleaner & greener way of installing and operating HVAC systems. The technology will increase HVAC system efficiency and reduce operating expenses by replacing a percentage of mechanical energy required to power a compressor,
thereby saving electricity, with modulated solar thermal energy. The SunTrac’s technology converts sun’s energy to heat, the ultimate renewable source, as against a photovoltaic electric panel system.With the collaboration ‘Perfect’ will be the only manufacturing unit of SunTrac outside U.S.A. All orders of Middle East regions, Australia & Asia will be supplied from existing Perfect’s manufacturing facility at Navi Mumbai.
By partnering with SunTrac for bringing highly sophisticated solar thermal technology, ‘Perfect’ would be able to enhance its products range and services to existing as well as new HVAC clients.The commercial production for the Hybrid Thermal System will commence in 3 months.The successful implementation/installation of these hi-tech products is likely to alter the landscape of HVAC systems in India. The initial period of the agreement is 5 years renewable on completion of the said period.

Here is a link to a PPT presentation about Perfect SunTrac Hybrid Thermal System’
Perfect-Infraengineers-Ltd.pptx (2.0 MB)

(Above details taken from Company Site and Annual Report)
The link to report in The Hindu Businessline regarding the new product is given below
http://www.thehindubusinessline.com/business-wire/suntrac-usa-and-perfect-infraengineers-partner-to-bring-hybrid-climate-systems-first-time-to-india/article9833344.ece
About SunTrac USA
SunTrac USA, located in Tempe, Arizona USA, is a privately-held company that manufactures and distributes Hybrid Climate Systems featuring their patented solar thermal panel system which is specifically designed for integration with residential & commercial HVAC systems. SunTrac systems utilize renewable solar thermal energy to create HVAC system energy savings of up to 40%. SunTrac’s revolutionary Solar Thermal Panel System creates affordable optimum thermal energy combined with precise temperature controls - an industry first!

Website: www.SunTracUSA.com

My Investment Rationale.
Perfect infraengineers is the only listed company in MEP, HVAC sector. As economy is shifting from informal to formal one they are going to benefit.
As Air conditioning is an underpenetrated area in India a lot of untapped potential is there. A huge %ge of perishable agri products such as vegetables and fruits is getting damaged in India. This problem offers huge prospects in air conditioned warehouses. If a system which can really save energy in air conditioning, I feel it can hit the jackpot.
Risks
Being listed in NSE SME platform the liquidity is the major risk factor. The Lot size is 6000 shares.
This is my first stock specific detailed post in this forum. I am not competent enough to judge management integrity, or efficiency by doing the number crunching, or analyzing balance sheets and to find business risk factors and red flags. I am betting on the big opportunity ahead if their innovative product “Perfect SunTrac Hybrid Thermal System” clicks.
Got information about this company first time from the following blog
https://bullbull.in/blog/can-perfect-infraengineers-do-a-shakti-pumps/
Discl>invested(This is my first SME stock. Feel it is a very risky bet for a small invester like me as it is nearly 5% of my PF size)

4 Likes

You have not shared any financial of the company.

Hi sir
I am not competent enough to analyze the financial statements.Also my investment rationale was the prospects of their new product. Experienced members of this forum, kindly share the financial analysis so that I can learn from all.

Hi … seems interesting post. However, the website of the company is not accessible, as the hosting provider says that bandwidth has been exceeded Probably company is hosting its website on a free hosting. This does not seem good for a listed company. I am unable to download the annual report.
Let us see, if website is online again. This will need lots of digging

The financials of the company looks pathetic , From IPO prospectus:

Even though top line has grown bottom line has been fluctuating , moreover the Cash flow has been negative.

website is down still not working :slight_smile:

Hi
The Website problem was temporary. Now its working.

Good write up @josephseby.
Any idea on the integrity of promoters?
Regards,
prasad

You fixed it ? Are you insider or what :slight_smile:

1 Like

One thing i would like to share here is , Its good to see it wrt to success story of Shakti Pump but there are failures stories like Nitin Fire as well.
Nitin fire also had the similar kind of collaboration with Worthington Industries US company ( Mcap ~3 Billion dollars) and the name of the JV was nitin worthington cylinders.
These things doesn’t always work out, It again boils down to the guys running the business.

Recently Nitin fire just announced to sell all its stake in nitin worthington cylinders & other assets to be able to re- pay its debt.

Investing in these is like shooting into the dark room, One has to see it as buying call options.

The news is not new, It came on August and stock went up to its peak around 37, Turned out to be sell on news type of opportunity from the face of it.

1 Like

As i was suspecting … I find lots of similarities with Nitin Fire management here too but markets may tend to ignore them. As markets love stories more than quality.

This is what their Auditors found out -

00 AM

Imagine what the Real mess might me.

The thing is bad governance is a DNA problem, I have seen multibagger had one thing in common they all were always governed well since inception, I don’t expect people to change over night.