Thanks Donald and team for putting out the Stock Story post on Shivalik Bimetal and it’s quite helpful and informative.
In the past, the company management has not given clear answers as regards to their current capacities for bimetals and shunts in terms of tonnage and what this would go upto post their expansion in FY22 or FY23. Also, we have to understand from the management – what is the kind of capacity utilisation that the company is operating at, for shunts and bimetals (both separately) at the current juncture, as of H1FY23 (as this can keep changing with the ongoing capex).
There is a possibility that a better way to look at the capacities of the company may not be on the basis of tonnage (weight) but on the length of the product (at least in the case of shunts) that the company can produce. This is because the management has in the past mentioned that one product with the same weight may command 40 times the price of another product (of same weight) due to the value addition done to that product. So we have to figure out the best measure to ascertain the company’s capacities.
Also, another important thing we need to get answers from the company, relates to the breakup of the sales value into volumes and realisation. Is the growth taking place in the company (for both products) primarily volume led or has the company benefited due to the prices of finished goods going up (since raw material prices had moved up in the past) or the product mix is changing etc etc.
We have to try to get answers from the company for this.
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