Hello.
I am invested in shivalik bimetal
And was looking into the results
I am attaching here my calculation
9 Likes
Fair value gain is reflected in the “other incomes”. Any idea where the acquisition cost to buy the remaining stake in the two JVs shows up?
1 Like
A subtle development and more importantly for investors community is - IR seems in place per press release - Dickenson. Surprisingly there wasn’t any formal announcement though.
Here some details about agency and clientele.
https://dickensonworld.com/freezone/news/
This is also evident from press release and hopefully Annual Report to reflect similar quality and help us understand company better.
While cost of hiring IR is a factor, here it shows management intent to communicate better with markets, a very positive step imo.
On a quick glance - One of quality fast grower who has seen a client with them is Armaan. Here is pre and post hiring view , while Armaan has delivered well and stays core reason, a good IR helps too.
Meaningful event in last year+ or so
- 8+ qtrs steady performance and quality of growth, sales and margins growth despite commodity going haywire
- Vishay concentration reduction - not far away it was near 50% type revenue
- EU and Asia picking very well - geo diversification ( details in last qtr deck)
- Market communication and now IR ( recent and wip)
- Brownfield expansion in FY21- FY 22 to increase capacity multifold - internal accruals
- Efficient and realted capital allocation in recent acquisition of JV to WoS
- Competetitive intensity limited given entry barriers, consolidation during covid impacts( UK Redbourn closing), and likely negative impact by recent geopolitics events ( e.g. Germany players)
Product, opportunities and moat/capabilities/ entry barriers have been well discussed in forum, forward looking they are well placed to play key themes of EV/BMS, Smart meters etc.
Invested and excited about possibilities, aided by management intent/steps taken.
28 Likes
Just listening to vishay concall. Some very interesting insights:
- The pricing & gross margins in resistors has been largely stable have actually improved QoQ from 31% to 33%.
- They find the economic conditions to be extraordinarily great. Orders and backlogs are at historically high levels. Concretely there is an order backlog of 7.6 months in the resistors segment.
- Concretely their resistor segment had 5% QoQ growth. I bet that a large part of that growth bridge is shivaliks shunts.
- Growth in automotive segment is expected to remain strong for vishay in midterm due to increasing share of electronic vehicles in overall market & general increase of electronics in vehicles.
- Significant investment is still to be made in charging infra (opportunity size is large for shivaliks shunts)
- Vishay enjoys a very strong position in resistor segment in autos, industrials.
- Guide for Q3 is 880M$ which is roughly 2% QoQ growth. Historically resistors have been one segment driving growth for vishay. This might continue. At least that is what shivalik investors hope for.
- On the question of slowdown & recession: essentially they said : what recession? Our orders & backlogs are at historic highs. We are able to pass on the price increases. We do not see any signs of weakness from any of our customers (realistically vishay is automotive + industrials)
- On management changes: will lay even more emphasis on growth
Disclaimer: invested, biased.
42 Likes
Had the chance to interact with an expert on BMS. Sharing some high level takeaways.
Most have been covered before in this thread, past work has been incredible. Thanks to every single person who helped solve a piece of the puzzle.
- On the Hall effect sensor vs shunt questions - Hall effect sensors are used when the amperage is high.
-
Designer of the shunts are crucial, as a badly made shunt is inaccurate. Shunts have a low ohmic usage, low energy loss, smaller size and better accuracy.
-
Different alloys of these shunts lead to different performance at various wattages, different profiles of resistance with change in temperature, etc. Further work for me: look into whether different alloys allow higher and higher current usage, etc.
-
Shunts are cheaper than Hall effect sensors, and Vishay’s shunts are the cheapest on the market.
-
Post from a few years ago was spot on based on the conversation:
- A single BMS uses between 4-6 shunts, the higher the amperage, the more the shunts used.
Disclosure: invested, biased. No transactions in the last 30 days.
24 Likes
Company to consider issunce of Bonus shares…
258e460e-0937-4f07-90c0-3c925ae784eb.pdf (232.7 KB)
10 Likes
1 bonus share for every 2 shares held .Record date to be declared later .
ee682942-3da9-4388-bc85-86a44b7f7cb4.pdf (342.9 KB)
8 Likes
Smart meter tender
- India´s largest ever tender for procuring 10 million smart meters issued by the Ministry of Power
- First phase is for procurement of 2.5 million meters, to be installed in the central & western region
- Project part of RDSS scheme of the ministry of power for discoms reforms; out of total budgetary allocation of Rs 303,758 crore to RDSS, Rs 10,000 crore is for smart meters
Source: Sector majors line up for power ministry's 10 mn smart meter tender | Business Standard News
(Business Standard, 01 September 2022)
Source: Smart Metering Deployment Statistics Across Various Schemes/States | National Smart Grid Mission, Ministry of Power, Government of India
As per the above, 4.8 million smart meters installed so far. 10 million smart meters tender is sizeable. Government estimates indicate deployment of 250 million smart meters for domestic consumers.
22 Likes
A logical question to ask is what are the possibilities for Shivalik shunts - here is a clue
- Shivalik sells in India for INR 15+ for 10K+ order.
Vishay sells for $12-$15 per peice for WSBS type shunts ( type ties to shivalik in points below) - though smaller quantities possible. This is a multfold markup, even after considering various overheads involved and sales infra reqd.
If one were to look at how much of Vishay shunt offerings are covered by Shivalik - my sense is a sizable - infact nomenclature may offer a clue Now one can imagine critical supplier status Shivalik holds for Vishay - if shivalik were to raise prices - will there be lot of resistance? Anybody’s guess!!!
- To further tie shivalik shipment to above nomenclature- here is a latest shipment data. Looks dor WSBS type - usually it hasnt been disclosed earlier.
It would be interesting to understand Shivalik strategy/Aspirations of direct supply in shunts( they already are doing bimetals), constraints per Vishay contracts.
26 Likes
The Problem with Prices on indiamart is that they are never updated. If a Page was made 10 years ago with X Price, it will remain the same even today for most suppliers. Though, it is clear that Vishay charges a substantial markup over Shivalik’s Prices.
2 Likes
Some interesting takeaways from 2022 AR:
- "Keeping in view the contribution made by Mr. N.S. Ghumman (DIN: 00002052) for sustaining the growth of the business of the Company futuristically, with the recommendation of the nomination and remuneration committee, the Board of Directors in their meeting held on 29th August, 2022, decided to ratify the existing remuneration of Mr. N.S. Ghumman, Managing Director of the Company for a further period of three years w.e.f 01st January, 2022" My note: Looks like ghumman ji will be around for 3 years at least
2.RESOLVED FURTHER THAT the ratification of the existing remuneration (amount of Rs. 3.00 Crore, as already approved by the shareholders in its meeting held on 11th September, 2019) of Mr. S.S Sandhu (DIN: 00002312), as a Chairman and Whole time Director of the Company for further period of three years w.e.f 1st January, 2022. My Notes: Remuneration being fixed at existing remuneration for 3 years shows that promoter are not increasing their remuneration despite much larger capex coming on stream & much more profit growth. Promoter remuneration as % of profits should come down in next 3 years. - Mr. S.S. Sandhu enjoys good health and is actively associated in the development of the Company. The Board recommends the resolution to be passed as special resolution by the Shareholders as per the requirements Companies Act, 2013. My Notes: essentially co is asking shareholders to allow Mr Sandhu to hold on as chairman despite turning 70 years in 2024 as a special resolution (for 5 years since 2022). Music to ears of shareholders.
- Co is expanding related party transaction limit from 30 lakh to 4 cr for being able to pay Mr Kabir Ghumman. Mr. Kabir Ghumman is a qualified Engineer holding Bachelors-Mech. Engineering. He was made responsible for the supervision of all technical and process engineering aspects of the Company at the manufacturing unit. With his exposure and experience in the designing and optimisation of use of machinery has developed good understanding of manufacturing processing. His scope of work covers his full involvement in the mechanical engineering aspects of the Company at plant."
- Steps taken to improve profitability: " Focus on high quality performance delivery and good relationship with existing customers to generate rapid new order flows. Widening of customer base for growth of business both from private and public sector. Use of the Equipments of latest technology for enhancing quality and reducing time.
- Updates on Unit 1: Construction of the Building and equipment installation on the adjoining land has been completed and commercial production has commenced.
- Updates on Unit 4: Construction of the UNIT-IV Building is completed, and the Phase-wise equipment installation/commissioning process is expected to be fully operational by the end of September 2022.
-
there are some very good details on the capital goods that shivalik makes for inspection, improvement of the EBW process : “Further improvements made in custom-built machines for automatic inspection of components;
• Additional Automated systems for high-speed measurement and dimensional checks;
• In-house development and building of additional electron beam welding machines;
• High-Speed automatic packing machines for electronic parts – Further improvements made in production
throughput.
• Design and building of custom machines for measuring and calibrating shunt resistors.
• Improved heat treatment process to improve performance of resistors
• Installed Energy efficient Vacuum systems” - Global Smart meter opportunity: The global smart electric meter market size is projected to reach USD 36.00 billion by 2028, exhibiting a CAGR of 8.1% during the forecast period
- Indian smart meter opportunity: Smart Meter National Programme aims to replace 25 crore conventional meters with smart meters in India. Smart meters are connected through a web-based monitoring system which will help to reduce commercial losses of utilities, enhance. revenues and serve as an important tool in power sector reforms. According to the recent data released by the National Smart Grid Mission, Ministry of Power, 3.73 million smart meters have been installed across the country out of the total allocated quantity of 11.16 million smart meters as of January 2022
- EV Opportunity: The global electric vehicle market size is projected to grow from 4,093 thousand units in 2021 to 34,756 thousand units by 2030, at a CAGR of 26.8%. . A report by India Energy Storage Alliance estimated that the EV market in India is likely to increase at a CAGR of 36% until 2026
- Shunt Resistors comprised 51.94% of total revenues and grew by 69.73 % YoY. Thermostatic bimetal/trimetal strips comprised 46.24% of total revenues and grew by 48.64% YoY
- Expansion is on going to meet the demand that is emerging as the world moves rapidly into smart meters, EVs, EVs charging stations, intelligent battery systems, solar energy farms with battery storage and also demands from the 5G telecom networks.
Overall looks like co is gearing up to scale up shunts division even more. We should try to understand in AGM exactly how and to what extent Shunts can be used in new applications like “intelligent battery systems, solar energy farms, 5G telecom networks”.
one of most surprising new details for me is extent to which shivalik might be backward integrated into capital goods/machined used in the manufacturing process. Further providing a competitive advantage against lower value shunt makers. Investors must drive a fine balance between understanding this process/capital knowhow knowledge & allowing the co to maintain its competitive advantages by NOT divulging such details to anyone in public including investors.
disc: INvested, biased
39 Likes
From some of the posts, it looks like Vishay makes exponential margins based on products made with Shivalik’s. Can’t shivalik make few of those and make even more margins?
If that is what the backward integration plans are, then which are the low hanging fruits Shivalik is targeting?
EV sales projections for 2030 changed each year that BCG released a report. Sales projections in the US for 2030 continued to grow to:
21% in the 2018 report
26% in the 2020 report
42% in the 2021 report
53% in the 2022 report
In the course of 4 years – from 2018 to 2022 – US EV sales projections for 2030 more than doubled, growing from an estimated 21% to 53%.
5 Likes
I found two nice videos to understand how shunts work for people who haven’t studied electrical circuits after school 
(I am one of them) : 1. General current sensing and 2. specifically in a BMS
1. Current sensing in general - This video by Texas Instruments explains how good quality shunts have to balance the opposing requirements of offset error & tolerance error on the one hand and power dissipation across the resistor on the other hand. They have also included a very handy price chart of shunt resistors with various shunt configurations (3 year old video)
Given that Shivalik shunts are used in high stakes applications, its probably safe to assume that the lower bound of price per shunt will be 0.5$ and the average price will more likely be closer to 1$ or more.
Combining this knowledge with @GourabPaul’s very useful posts regarding no. of shunts in ICE and EV powertrains can help roughly size the auto opportunity. Similar data on no of shunts per device, if gathered for smart meters and other electronic applications, can help size those opportunities too.
Conventional IC vehicles use a minimum 3-4 shunt based sensors. They have a 12 V power source and have an alternator to charge the battery.
For the x-EV, depending on the power train design the number of shunt sensors may increase of decrease. the current sensors are used in BMS (minimum 2), DCDC (minimum 4), Inverter (minimum 8), Brake Recuperation Machine (BRM) (minimum 2), charging circuit (minimum 2) , induction motor (minimum 6) on top of this there are additional monitoring circuits, protection circuits which can increase the number of shunt sensors in the vehicle.
As the industry is migrating from conventional IC based engine to battery based systems, the number of shunt sensors are definitely on the rise as electric power is routed in the entire system and it is split between various sub systems. The increase will also be evident in 2W and 3W segments as they migrate towards electric vehicles.
2. Functioning of a BMS along with use of shunt - While this video is mostly about how a BMS works and how active/passive cell balancing is implemented, from 2:24 - 3:58, the video explains the functioning of the fuel gauge monitor where shunt resistors are used to measure currents flowing in the system.
As an aside, one of the key players in this market, Rohm semiconductors started their journey in this space by manufacturing resistors. From there, over time, they diversified to other passive components and ICs and semiconductors. So as @rambaranwal has said across multiple posts in this thread, there is scope for Shivalik to forward integrate into larger semiconductor components in the future. It would be really helpful to understand their ambitions in this regard. Do the founders have the ambition of becoming a semiconductor giant from India or are they content with scaling up their existing verticals?
While semiconductor FABs would take time to build we already have fragmented PCB manufacturing factories and register and capacitor manufacturers in India, some of which would grab this opportunity to scale and improve their capability to support in building this eco system.
Shivalik manufactures, shunts, SMD registers along with some capacity to manufacture PCBs for defense.
Their Shunt and SMD register quality is world class and auto grade. The capability required to manufacture consumer grade components is much less than auto grade. I am sure they would be part of this opportunity looking at their relationship with top quality conscious customers they supply already.Only thing we need is management to grab this and they are just a tiny fish in big opportunity ocean.
16 Likes
@sahil_vi ,
Thanks for the deep insights into the working of this company .
I went through the annual reports ( from 2017 onwards), but in each of the reports, the expansion is outlined only vaguely . I couldnt find any reference to actual capacity utilization levels and how this proposed expansion will play out on the revenue front ( Though in this thread, some where it is mentioned that capacity will get tripled.) but no details on what Unit-IV is about and its capacity after expansion.
( A somewhat dumb question, what about UNIT-2 & 3 ? I couldn’t find any info on that ) ?
Would be great if you can point me to where to find this .
Also, are the current utilization levels on all the units shared anywhere ?
[Disc] : Invested from lower levels.
Regards,
Abhijit.
5 Likes
Planning to attend agm will try to ask management no idea right now
One suggestion do go through agm notes. Lot of details in AGM notes. That is where management mentine that the capacity will get trippled.
13 Likes
New client update. The order is for thermostatic bimetal parts but i have been tracking their orders for some time now on the website and haven’t seen such big volumes in a single order for thermostatic bimetals before this one.
Always thought that Shunts would be the growth Part but the management seems to be finding a lot of growth in the thermostatic Parts too by catering to newer clients. The client is into the manufacturing of grey iron castings.
Growth seems to be secular on both the Product segments for shivalik.
Disc - Invested
43 Likes
I am very novice about the technology related to shunt resistor but for disclosure, I am invested in this company purely on the basis that shunt resistor is a very critical component for electrical goods and would also play its part in EV, BMS, and electric meter. Another reason is that it has an entry barrier of 4-5 years and can be considered a niche business.
Now my question is that above, @nirvana_laha was talking about how this company should or may explore ways to get into the semiconductor field of PCBs and others, but does the recent announcement of the Vedanta-Foxconn semiconductor factory dampen the future prospect of this company? Also, is the Vedanta-Foxconn semiconductor factory capable of delivering or producing shunt resistors?
Sorry if my question is silly.
1 Like
Hi,
Your question isn’t silly. I am by no means knowledgeable wrt semiconductors, but I am fairly certain that shunts are way down in the pecking order as components that go into a chip/semi-con assembly. They are one of the building block items almost. Consider shunts to be like bricks or blocks that go into making a building which is like a semicon chip. I think companies that graduate from making resistors get into other passive components like capacitors and inductors and then progressively into elements like transistors and MOSFETs.
I don’t think companies like Foxconn go into making these building block elements, but rather get involved in chip fabrication stage which involves putting these building blocks together on silicon wafers to create circuit boards.
So I think if anything, this occurrence might be a catalyst for SBCL to move up the value chain in semicon component manufacturing.
This is a very layman’s view, so please take it with a pinch of salt. I’d like to hear from the experts myself.
7 Likes