Yes, it has an IT business under it whose revenue and net profits should be valued at much higher multiples than workforce management business

Awfis in its quarterly call mentions EFC India as their competition in the listed space.Do watch out for that company aswell if you are following this space

Another solid set of nos, with sales growing by 14% and EPS by 41%. They are very confident of maintaining 15%+ sales growth and becoming debt free in next 3 years. Concall notes below

FY25Q1

• Revenue growth of 14% in Q1 (12% in established + 19% in value-added), volume growth of 16%. Targeting 15% growth in next 3-years

• Capex: 39 cr. (18 cr. in established + 21 cr. in value added). Will be ~150 cr./year for next 3-years totaling 450 cr.

• Debt reduced by 38 cr. in Q1. Will become debt-free in 3-years

• Working capital reduced to 100 days and should further reduce to 85-100 days in 3-years

• Middle east divestment proceeds will be realized in 60 days

• Non-core divestment: Realized ~30 cr. and targeting to realize ~60 cr. by end of FY25 totaling to 90 cr. in FY25

• Import: on CIF basis, 60% RMs are imported (mostly from Middle east) and 40% are domestically procured

• Export: only exports LPG composite cylinders, contributes ~2% of overall sales

• International business: manufacturing is mostly done in the respective countries (30% MENA, 50% Southeast Asia, 20% USA)

  • MENA: plants in Sharjah, Bahrain, Saudi and Egypt

  • Southeast Asia: plants in Thailand, Malaysia, Indonesia, Vietnam and Taiwan

  • USA: 3-4 plants in Chicago, Austin, IOWA

• Expecting 450 cr. CNG in FY25 (vs 308 cr. in FY24)

• LPG is operating at 90-95% utilization, can do revenues of 230-240 cr. at current state (210 cr. done in FY24)

• CNG cylinders for OEMs: will focus on commercial vehicles, it’s a 2-3 year process

• EBITDA margins in LPG and CNG segments are ~18%

• Solar contributing 10% of their energy which should increase to 30% by FY25 end

• Pipe plants: 4 manufacturing plants, 1 in Silvassa for western region, 2 in South India (one in Hyderabad and second in Gummidipoondi), 1 in Kolkata for east. Business done through 10-15 EPC contractors (e.g. L&T, Indian Home Pipe Voltas, JSW)

• 92% business is B2B and 8% is B2C

• NED Energy (based out of Hyderabad) is developing Transparent Container Batteries (TBS; used in railway). Have invested 65 cr. and hoping to reach revenues of 250-300 cr. in 3-years

Disclosure: Invested (sold shares in last-30 days)

Some insights from the Q1 Con-call.

1. In answering the first question Mr. Rupesh Bhai Mehta said the average realisation will increase to 25 lakhs at the end of the year.

I hear = 22 lakhs per machine x 1605 machines ( 80% utilization ) = 353 crs of revenue

2. In answering the second question Mr. Rupesh Bhai Mehta said margin can improve to 27%

I hear 19% Op margins for the entire year = 67 cr
Other income 1 and depreciation as 6 take my PBT to = 62 cr
And PAT to = 46.5 ie. Another doubler of PAT for 2 connective years without diluting equity and without taking debt = High ROCE/ROE

3. FY 25 = 24 lakhs per machine x 2300 machines ( 85% capacity utilisation ) = 552 cr

With 24% operating margins = 132 cr
Other income 2 and depreciation 8 take my PBT to = 123
PAT for FY 25 = 92 cr = another possible doubler in FY 25 before the new plant comes up for 2000 machines and doubles the PAT again for the following year but with newer tech available from the new Japanese JV partner and exports markets get accessed through their network.

Reminder, 8% GST return and 200% of research expenses return in the new facility will flow straight to PAT and increasing PAT Margins closer to 20%+. Lately Unheard in the manufacturing space.

Long-Term Vision: I plan to reassess my investment only after the new facility starts production in two years. This decision is grounded in confidence in the company’s strong capital allocation strategy within a supply-side dominant sector. The focus will be on assessing the execution of capital allocation, the associated ROCE/ROE, and, most critically, the management’s commitment to securing superior technology through the JV—ensuring no compromise on technology quality, which is currently unavailable in India.

For further learning we must understand that, The five most important players in the Japan Machine Tool Builders’ Association (JMTBA) based on their global influence, market share, and technological advancements are:

1. Fanuc Corporation
2. DMG Mori Co., Ltd.
3. Yamazaki Mazak Corporation (Mazak)
4. Okuma Corporation
5. Makino Milling Machine Co., Ltd.

Ranking by Network Size:

1. Fanuc Corporation – Largest worldwide network, extensive in over 100 countries.
2. DMG Mori Co., Ltd. – Strong global presence in more than 80 countries.
3. Yamazaki Mazak Corporation (Mazak) – Extensive manufacturing and technical center network.
4. Okuma Corporation – Broad international presence but less extensive than Fanuc, DMG Mori, and Mazak.
5. Makino Milling Machine Co., Ltd. – Focused global network, especially in key markets.

This ranking is based on the global footprint of these companies, considering factors like the number of international offices, subsidiaries, distribution channels, and service centers. Fanuc leads due to its unmatched global reach and extensive presence across various regions.