Uni Abex Alloy Products

Stock Opportunities Untested - but worth a good look
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Business Details:

  1. About company : With a legacy spanning 50 years, It is one of the leading manufacturers and exporters of centrifugal and static castings in heat, wear and corrosion-resistant stainless-steel alloys.
  2. Manufacturing facilities: The state-of-the-art facility located in Dharwad has helped it to consistently push the boundaries of innovation, developing new alloys and exploring cutting-edge materials and technologies. It has changed the outlook of your company from a manufacturer to a solution provider.
  • It has 10 MT continuous Omega sand plant for static castings and 3 MT continuous Omega sand plant for core making.
  • The Static foundry produces 1200 MT of saleable castings annually & can pour single pieces up to 3000 kilograms.
  1. Products: Our core expertise lies in the production of high-quality alloy steel castings for decanters and reformer tubes.

  1. State-of-the-art testing facilities:
  2. Clients: |613x319.9296991996609

Growth:

  1. Growth opportunities in marine applications:
  2. Growth opportunities in Defence applications:

  1. Petro segment Demand:

Profitability:

  1. Margin expansion can significantly boost the profitability over the years:

Strategic Intent:

  1. Focused on increasing product line,customer base and increasing OEM customers : Our investment opportunities align perfectly with our strategic objectives, enabling us to grow our business, improve our product line, and cater to a larger customer base.
  2. Aspires to move up the value chain:

  1. Focused on stringent quality control:

Competitive Advantages and Intensity:

  1. Developed centrifugally cast Hastelloy assemblies for european OEMS:

  1. Partnered with the Tata Group to develop air injection tubes critical for sponge iron technology:
  2. Produced 50 chrome - 50 Nickel Niobium alloy components for the Indian Navy for application in fuel ash environment:
  3. Developed parts equivalent to UM-Co grade, a Cobalt-based alloy for steel mill applications: |624x494.5761564348155
  4. Capabilities include both horizontal and vertical centrifugal casting, as well as static and sand casting:

Financials:

  1. Huge OPM expansion over the year and low profit base:
  2. Low equity capital and negligible debt and increasing reserves:
  3. Valuations: Its trading @14.5x FY25 earnings without growth.

Disclaimer -Invested and biased.

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hello, I’m not sure. but the following screenshot has got me worried. why trade receivables and inventories cost so much?

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Q3 results are out.

Good improvement in margin YOY and sustaining on QOQ basis.

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Isn’t that okay for a company that doesn’t make recurring consumption products?

They are able to generate enough OCF and ROCE is good. I believe structurally they will benefit from industrialisation especially capex in Steel & Oil sectors.

They seem to be taking it slow in new actions- corporate actions or business actions (excluding capex). No diversification strategies, but that is good. More focus is given to operations which is the be all and end all for engineering companies!
There’s some investment in R&D with tie ups with good institutes, and some attempt to attract young employees. Time will tell if they are successful.

Yet even with the lack of eventfulness, they are moderately undervalued, especially WRT cash flows. Inventories are high, but again remember this isn’t an auto parts company who keep selling to OEM etc.

I feel worst case over 3 odd years, you’ll not lose money, but whether you’ll get returns is for the future to tell.

DISC: Small monitoring position in company

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