Shivalik Bimetal Controls Ltd (SBCL)

Before @Donald sir answers,

Just my views (proper results reading is an essential skill to be a good investor…)

First starting from Balance sheet observations from H1

1. Property plant and equipment increased from 76.7 crores to 91.84 crores. In line with the guide of expanded brownfield capacities coming on stream.

2. Capital works in progress is at 14.31 crores. Indicating further capex that might come on stream. Their guide was to increase capacities overall by 60% in next 2 years, this expansion will be brownfield in nature at the moment. Post space is exhausted, they will need a new Greenfield land.

Coming to cash flows (Very important)

1. Cash Flow from operations in Last H1FY22 were negative due to increase inventories.

2. Inventory situation has normalised. Cash flows from operations came in at 24.88 crores vs Ebitda of 50 crores. Full year cash flow will be interesting to see. In B2B businesses and export oriented businesses. Certain amount remains stuck in WC. A good improvement overall in cfo/ebitda in First Half vs last financial year.

3. Capex spend as indicated in CFI is at 17 crore for H1 of this financial year.

Coming to Income statement:

1. Q2FY22 Results on consolidated basis: Topline was 76.23 crores (note here I am excluding other income impact)

Q1FY23 Results: Topline was 110.78 crores (Exluding other income, idea is to get an idea about the core business growth)

Q2FY23 Results: Topline is at 117.59 crores (Excluding other income)

(Other income includes: Other Income during the half year ended September,2022 and quarter ended 30th June,2022 includes fair valuation gains aggregating to 5.12crores on existing stake in SEPPL & SBEPL.)

YoY: Growth of 54% in topline YoY.
QoQ: Growth of 6.14%

Coming To Ebitda (op from screener):

Ebitda in Q2FY22:18 crores
Q1FY23:24 crores
Q2FY23:26 crores

Margins are sustained at 25% Ebitda. Inspite of increase in Employee expenses from 8 crores to 10 crores QoQ and Increase in other expenses from 17.82 crores to 20 crores+ QoQ. Signifying increasing employee count.

A good source to check number of employees over a period of time is the EPFO website. Will give you an idea by how much the co is expanding. I did this for Arman fin for last 1.5 years, a good tool.

PAT:

Q2FY23: 19 Crores (ex out other income of 2 crores and this comes down to 17.08 crores)
Pat for Q1FY23: 21.68 crores (ex out other income and this falls to 14.47 crores)

Thus, signifying QoQ PAT growth and YoY you must have already seen.

QoQ Pat growth of 18%. Gross margins have expanded here, coupled with sales growth.

As investors we should be more concerned with the core business growth. Always ex out other income to calculate. Exclude Other income from PBT to get to true PAT here. I have just done a rough calculation**

This was just my take away, I can be wrong.

Stand-alone Profits numbers have been much better, pointing to decrease in profitability in the subsidiaries( Shivalik Engineered Products Private Limited, Shivalik Bimetal Engineers Private Limited)

Coming to management commentary:

Disc: positions in both SBCL and Arman. Not a reco. Please interpret independently. VP is a tool for collaboration.