A post in this thread after a long time… I have also just started looking into this company… Muthukumar, The infomation above is good. Have you also looked into its product catalogue and compared it with other players in this industry like KSB, Shakti, etc?
Also has anyone got info regarding present capacity utilisation. How much capacity will be added with the expansion at Greater Noida which as per AR is supposed to complete in last qtr of FY14.
@hitesh, @manish – I’ve tried analyzing the product catalogue comparison and capacity expansion. Could not make much progress. Have sent few mails regarding capacity expansion timelines, but did not get any responses from roto investors relations team.
Any views on Re. appreciation (since all revenues are coming in USD. And GM may have impacts). Please share your updates on the analysis and views.
Recent updates:
-Roto Pumps is planning to set up a joint venture company in Singapore.
-Roto Pumps will set up a wholly owned subsidiary company in the US
Some recommendations: http://www.sunday-guardian.com/business/roto-pumps-at-rs-140-is-an-excellent-buy-for-the-medium-term
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Any one tracking this company, came across this article
As per the article, the capacity has been ramped up, leaving significant room for market capture/share. results also pointing to the same
Today’s result seem to be quite good. Q4 FY '18 results were also decent. They have built capacities in advance. If demand revives over next few quarters then there could be significant increase in their topline.
Roberto el S
Disc: Invested
roto pumps have the highest margins in the industry compared to other players like ksb , shakti, kirolskar,etc. it seems to be only focussing on high margins products, roto pumps has hardly 2-3 products offerings
also roto enjoy the highest share of exports as a percentage of sales when compared to other players.
roto pumps right now is operating at low capacity utilization hence leading to fixed asset turnover. the retrun ratios might go up with this turning around.
attaching a sheet comparing the basic financial across all the major players in the industry
Pumps.xlsx (14.9 KB)
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we need to understand the product mix better and how the company plans to improve its sales , triggers for future growth
I had worked on this company few years back. It’s an interesting company. However as you mentioned they are more focused on exports so to ascertain the drivers of growth are a bit difficult. They are into a niche area of pumps which is only ~5-10% of the overall market. Their focus has been to get into spares -which is higher margin and recurring. They had done a fairly big capex in Greater Noida, which I think has come on-line in the last year.
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- the company manufactures single screw (progressive cavity), twin screw and three screw pumps which are used to transfer viscous liquid through a pipe. this is a niche market, because making pumps for viscous fluids is not easy .
- these pumps are more complex to design , also there is a large degree of customization for these pumps.
- roto pumps is registered into more than 70 countries , registrations have a time consuming nature which acts as a an entry barrier
- roto pumps has a strong brand name in the organized market, capturing 40 % of organised niche market .
-with strong capex due to come in oil & gas industry roto pumps can benefit
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Roto Pumps has announced that the registration of Design of the new high efficient maintenance in place of the progressive cavity pump has been granted by Controller General of Patents, Designs & Trade Marks.
Above news from businessline magazine
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What is MoneyLife complaining about here? Anybody got a subscription so they can share the content of the article?
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Allotment of land for capex
The whole capex is funded by internal accruals it’s a debt free company having strong cash flows and strong margins.
Current fixed assets are about 40 cr and post capex fixed asset will be more than 100 Cr and no debt on books current Mcap is 250 cr.
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Just saw your post. The Moneylife article is saying that the return on equity (RoE) of the company is 7.85% and net profit to capital employed ratio is just 4%. Why are the returns so poor for a company that derives 65% of revenues from exports? Why has it expanded its capacity when the returns are poor? Another remark is that cash generated is disappearing into fixed assets which do not generate enough incremental sales.
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Just to be clear: I replied to your post regarding the contents of the Moneylife article. Personally, I am not actively seeking those answers, Moneylife article asked those questions.
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Anyone have idea why promoter group selling
Anyone new who wants to understand the company’s products can watch this video -
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I wonder why this Roto Pump thread is dead. Is there any alternate thread for this company?
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Brief about the company: Roto Pumps was founded in 1968 and is a manufacturer of industrial pumps. Typically, a pump transforms electrical energy into hydraulic energy to move fluids (liquids or gases) or occasionally slurries by mechanical action.
Types of Pumps: Broadly there are 2 types of pumps i.e. pumps which are 100% based on centrifugal technology and other one is majorly based on positive displacement pumps.
Centrifugal Technology pumps (Traditional Pumps): Centrifugal pump is a very old technology used to move simple fluids (i.e. Water or thin liquids) by means of the transfer of rotational energy from one or more driven rotors, called impellers. The impeller of a centrifugal pump must rotate continuously and quickly in order for it to function effectively.
Limitations: Centrifugal pumps lose efficiency when dealing with more complicated fluids (i.e. thick fluids such as Oil, Chemicals, Paints Pharma etc.) because of increased resistance and the requirement for higher pressure to maintain a certain flow rate.
Positive displacement pumps: High viscosity oils or slurries like mud can contribute to overheating and excessive wear, which can result in damage and early failures. Positive displacement pumps are less likely to experience these issues and frequently run at much slower speeds. Moreover, a centrifugal pump needs to be primed with the pumped fluid at first since, in contrast to positive displacement pumps, it cannot create suction while it is dry. As a result, applications with intermittent supplies are not suitable for centrifugal pumps.
Advantage of positive displacement: More efficient in handling complex fluids with high viscosity. More efficient with increased pressure and does not require any priming (i.e. removing air from the suction line).
The centrifugal pumps market is huge and highly competitive due to simple technology vs positive displacement pumps. The spare parts are critical in positive displacement pumps and have high margins.
Roto Pumps is the only listed player in India for handling complex fluids through positive displacement pumps. The company manufactures Progressive Cavity pumps, twin crew pumps etc. They are now venturing into diaphragm and gear pumps and also focusing on solar pumps. Roto Pumps has wholly owned subsidiaries in America, Germany, Singapore, UAE and step-down subsidiaries in North America, Malaysia and Africa.
The company has an excellent track record of effective capital allocation with negligible debt and no unrelated diversifications. Over the past five years, the company has had gross margins of over 50% and operating margins of over 20%.
Revenue Break up: The company used to generate 2/3rd sales from export since complex fluid pumps market is still small in India. Almost 50% revenue is generated for the sales of spare parts. Since complex pumps required higher research and development hence the employee cost is almost 25% as per AFS of 2022-23.
Capex:
- The company has announced capex and new factory for manufacturing solar pumps in greater Noida under the name of Roto Energy Systems Limited is under construction and will be operation by the end of current fiscal.
- The company has already developed downhole pumps and mud motors pumps recently.
- Further the Company has initiated the installation of an additional solar power system of 550 KWp at Greater Noida Unit (Cost Rs 2.13cr). With this installation, the company is able to meet around 20% of its electricity requirement from solar power.
Disclaimer: Above study is for educational purpose only and not a buy sell recommendation by any means. Invested from lower levels and added more recently.
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