5 years ago there were the following subdivisions of the company, Rossell tea, Techsys, Aerospace Services, and Hospitality. In 2019, the company’s focus became clear that Techsys is the next growth engine and they proceeded to shut off hospitality and aerospace services. In 2019, revenues from Techsys was 98 crs which now has become 185 crs (which is a 13% cagr). Here revenue jumps are possible on the acquisition of new clients/new platforms which is a long business. Along with this, due to the nature of the industry, it had a very long cash conversion cycle due to high inventory levels. The company has been able to cater to this, this year by shifting some inventory purchases to be done locally. How they win contracts is by establishing a relationship with an aerospace company, then they are invited to RFP(request for proposal) by them. Once the company receives all RFPs the price is locked according to their proposal not subjected to be changed for the entirety of the duration. Wire Harness as a market is just under $2 Billion with the Industry going through a consolidation. The company believes in value unlocking due to 2 areas, demerger of both divisions and new business (expectation of Boeing and Lockheed to expand along with adding IAI as a client).
The company has reduced almost all of its long-term borrowing. Hoping to see the efforts end up bettering return rations.
Disclosure: Not invested
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