Shivalik Bimetal Controls Ltd (SBCL)

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Details about EV Plans at Global stage

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What is the head winds in this stock

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@abi_sharma

US recently announced heavy duties to be imposed on Chinese imports into US viz . EV batteries, cars, solar cells, aluminium among others . With these duties the export to US will be impacted so the next big market for chinese to dump the extra production will be india .
EV and batteries uses shunts, so if cheap producta from china are getting flooded into the market than domestic demand for shunts will be affected unless India also announces similar duties like US or YS lifts these duties, both look unlikely at the moment. This is one of the main reasons i think SBCL is see a price correction
Shivalik has had a tremendous run and the long term prospects look good, not to forget that shunts are also used in electric meters and many cities are looking to adapt these smart meters
Disc : not sebi registered . Not a buy/sell recommendation

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I think when Elon Musk went to China Before India , he was intimidated by Chinese since 40% of raw Material to Built Tesla batteries comes from China. If Tesla Moves Production to India His Cars will be more competitive with Chinese Car makers . In Response US Govt Imposed tariffs and EU is in process to do so.
Now Tesla coming to India would have been great trigger for companies like Shivalik Bimetal.
Alas ! now it might hurt from opposite end as you mentioned about Chinese dumping their product elsewhere where Shivalik might be a supplier. Indian EV market is still in nascent stage.
Only after New Govt is formed and we start commercial mining of Lithium , we might have a shot.

Just sharing my thoughts might be wrong

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Disc: invested

As a long-term investor, I see significant potential in SBCL providing impressive returns. However, the substantial increase in “other income” raises some questions. I haven’t come across any news regarding the sale of large assets that could justify this unusually high figure. When examining the revenue, it appears to be flat. This might be due to a typical yearly cycle, but as I am still in the process of understanding the company’s patterns, this warrants further investigation.

Additionally, the 8% increase in expenses is concerning. A notable rise in raw material costs could be a contributing factor, possibly due to a surge in copper prices or other similar inputs. Given these factors, the flat sales figures are somewhat disconcerting.

https://www.bseindia.com/xml-data/corpfiling/AttachLive/e9fd5a10-97eb-492b-a84e-c3dd95fcbe63.pdf

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Its PLI income. Please read note 3 page 17, copied below

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I dont see any negative in this type of other income which is related to PLI which will help SBCL to invest more and expand. these type of PLI incomes usually realised in Q4.

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Why is the comapny doing CAPEX in electrical contacts if the space is highly competitive and even after CAPEX they will get a maximum 14% EBIDTA margin as mentioned in Q3FY24 concall

Can this Bring back the EV Charm and incentives by Govt ?

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Yesterday the promoter group “TSL Holdings Private Limited” bought 4800 shares as per the BSE disclosure:

This increases their holding by 0.01% from 5.85% to 5.86%. However, the same promoter group sold their stake during last August, on 07/08/2023, which reduced their stake from 14.53% to 5.85%. Essentially they sold 8.68% of their stake and now they bought 0.01% stake.

As an investor this makes me very uncomfortable. How do you interpret this?

Disclosure: Invested.

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on 4th June, they further bought 4000 shares from the open market

the promoters also sold millions of shares few months back :frowning:

Was it open market or block deal? I think FIIs bought and some of the names in public holding. how can we see that data?

https://www.screener.in/company/SBCL/#shareholding

Jun 23: Promoters: 60.60%, FII: 0.46% Public: 38.77%
Mar 24: Promoters: 51.13%,FII: 3.26% Public: 43.70%

Maybe this dilution helps in increasing floating shares, however, 0.01% increase makes me worried about possible future dilution if any when revenue is flat for past 6 quarters.

Disclosure: Invested.

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Ref Dec 23 concall where promoters clarified that they have no plans for any further stake sale

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