Shivalik Bi-Metals AGM Update:-
Here are the notes from the 38th AGM of Shivalik Bi-Metals:-
- Current business mix is 50% for Shunts and 50% for Bi metals. Overall end usage is:-
30% for Auto, 30% for switchgears, 40% distributed. Last year, 47% of growth was contributed by volumes.
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On Pricing: Enter into contracts based on pricing of raw materials of previous month’s average or last quarters average. Thus, able to maintain the margins.
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In last 36 years of business, no customer has came close to shutting down their lines due to non supply of products from Shivalik. Once the situation was extremely close, one of the directors went in his car to deliver the products.
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One of the customers even hired a private jet, as he needed the Shunts to be delivered to China for the launch of his new vehicle.
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Shivalik has become the reference standard of the industry. Most of the customers are new to shunts. Shivalik does the handholding process.
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Shunts are used both in Electric vehicles and Electric Vehicle Chargers. Usage of Shunts in EV is 8-16x that of normal ICE vehicle BMS.
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Domestically, we are already dominant with the supply of shunts to the local customers. Supplying to Tata and Mahindra already. Problem is low adoption of EV’s. Last month barely 4k EV cars were sold.
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Long term stability is the most important in shunts. As life of shunts is forever and there is no replacement demand. We supply the most stable shunts in the world.
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In a nutshell: most reliable, lowest cost, most stable shunt suppliers in the world.
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Current market share:- more than 10% in Shunts in the world, which we expect to increase in the coming years. In Bimetals current market share is 16% and it can grow till 22%.
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Surprised with the growth seen in Bimetals. Bimetals, expecting growth to be strong for next 2-3 years. Bimetals, have finally landed customers in USA, and have added new clients in this business division.
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3 years back the large customers with whom we won approvals for Shunts. Have finally started. Seeing increasing off-takes from them and increasing engagement.
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Can potentially forward integrate into Current Sensing modules from Shunt Resistors. This is the natural progression. These products are already under the works.
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Some customers are using Shunts, and some use Hall effect sensors. Shunts are more advantageous. The users of Hall effect sensors use the product because they don’t have a reliable supplier of shut at the moment. Even our largest customer came to us using the Hall effect because he didn’t have a reliable supplier of Shunts before.
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75% of the products are custom made for customers. Customers invest in the tooling kit due to this, they keep coming back.
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Inline products test, invested in automation to keep checking the quality of shunts being produced, and no human intervention. These investments are done not to cut costs, but to improve quality. (No process that can ensure no product recalls, spoke to some former shareholders and asked the management directly). Primarily invested in end of the line automation. Can make shunts to as small as +/- 1 micron.
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Shivalik vs Competitors:-
A) In one of the products asked by our customers. Competitor took 4 years to develop vs 18months for us.
B) Lead time for competitors is 50-54 weeks. Our lead time is substantially lower.
C) Won a contract for 5G SMD against one of our competitors by improving the design and made it cheaper. This is a large, one time business. Won’t be recurring.
- Products:
Thermostatic Bimetals:
Majorly used in the automotive cooling applications. Cooling fan used to consume 20% of engine’s energy earlier. This product sense the temperature and turns the fan off/on. Saving fuel and engine’s energy.
Expanded a lot in American markets for this product, expect growth here too in spite of it being a mature product.
Wholly owned subsidiary makes Brared contacts and welded contacts. These are used in switchgears, one of the customers forced them to develop this product,
EBW Shunts:
Used in Electronic metres. Shunts even here have multiple advantages over hall effect sensors.
Other uses (Plating shunts): when vehicle stops, battery goes off. Even ICE engine cars have battery management systems. Requires a sensors as well.
In other products such as rivets or Silver inlays competition is high.
- JV: 16% with ArcelorMittal. No plans to enhance participation. Has helped them though.
On Expansions:
-Currently working in 3 shifts (24 hours)
-Expanded capacity 2x in last 3 years. Plan to further expand it by 60% in next 2 years.
-From 25,000 meters to 40,000 meters (feel free to correct if the metric of measuring is wrong, or its metric).
-Current infrastructure can support one more building. Post that company needs to look for a new piece of land.
Disclosure: invested. Top 7 position for me. Not sebi registered. No trasactions in last 30 days.
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