About:
Ultracab (India) Ltd. (UCIL) is engaged in manufacturing and exporting electrical wires and cables in India. UCIL, promoted by Vaghasiya and Shingala families, manufactures wires and cables at its facility in Rajkot. It was incorporated as a private limited company in 2007 and reconstituted as a public limited company in 2014. The products are sold under the brand, ‘Ultracab’.
It is a listed company promoted by Mr. Nitesh Bhai Vaghasiya and Mr.Pankaj Bhai Shinghala, who have an extensive track record of more than two decades in the diverse industries of manufacturing of wires and cables and trading of cables. They are supported by a team of qualified and experienced professionals, which has helped the company toestablish a healthy relationship with its customers. The company’s experienced management and long track record of operations have enabled it to develop a strong reputation for quality and reliability.
KEY POINTS:
Product Portfolio
- Domestic Cables - PVC/XLPE Power & Control Cables, Multi-Core Flexible cables for Industries, House Wires/Building Wires, Flat Cables for Submersible pumps and more.
- International Cables - Auto Cable, Industrial Cables, Welding Cables, Electric Power Cables.
- Special Cables - Super Flat Cable, Ultra Triple Protected (UTP) House Wire, Elevator Cable, Solar Cables, Control Cables.
Revenues
The company derived majority of its revenues from domestic sales whereas exports was ~1%.
Manufacturing Facility
The manufacturing facility of the co. is located in Gujarat and is spread over 11483 sq m area and has a 100% in-house facility from wire drawing machine until testing on finished products. It has purchased additional machinery to double the production capacities of power and control cables.
Industries Catered
The products of the company have application in industries, railways, real estate and agriculture segments, etc
Clientele
The company has corporate and global clients like Adani, ABG Shipyard Ltd, ABB Ltd., Alstom T&D India Ltd, Hindustan Zinc Ltd., Voltas Ltd., Tata Power Project, Maharashtra state electricity distribution co. Ltd. etc.
Participation in Railways Tender
The co. has recently participated in the tender of Indian railways of Rs. 800 crore and hopes to get Rs. 35 to 40 crore business from the Indian Railways.
SWOT Analysis:
Strengths
- Stock trades at 0.98x of its book value.
- The company has delivered good profit growth of 50.8% CAGR over last 5 years.
- Debtor days have improved from 57.5 to 42 days.
- Growth in Net Profit with rising profit margin (QoQ).
- Growing revenue every quarter for the past 3 quarters.
- Annual Net Profit improving for last 2 years.
- Zero Promoter pledge.
Weakness
- Although the company posts profits it has not paid a dividend.
- Promoter holding has declined 2.43% in the last quarter.
Opportunities
- Effectively using capital as RoCE improves in last two years.
- Effectively using shareholders fund - Return on equity (ROE) improving since last two years.
- Efficient in managing Assets to generate Profits - ROA improving since last two years.
Threats
- The stock has good financial performance with good valuation but lacks price momentum.
- Highly competitive & fragmented nature of industry.
- Exposure to volatility in raw material prices.
Disclaimer:
I am not a SEBI registered advisor and this report is solely for educational purposes. The information provided does not constitute any form of recommendation. Therefore, please conduct your own analysis before engaging in any trades or consult your financial advisor. I holds no responsibility for your intended decisions and any resulting financial losses.
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