Tamboli Capital: Its a Casting Company!

Hi,

I recently attended AGM of Tamboli Capital and here are my notes though many points @harsh.beria93 has covered but putting this out of the sake of completeness for the remaining points

• MArgin compression is due to external factors and product mix change
• We have contributed to Chandrayan 3
• We have used lean phase to enhance out manufacturing capability
• Renewal of ISO 14001 and other certificates indicate
• Future prospects for company like ours which is component manufacturing remains very promising
• BD efforts have been robust and highest ever new projects in pipeline
• This BD effort is likely to result in strong growth in near future
• We announced additional capex for current year
• Company has just signed agreement for 1 MW solar power plant in our premises
• next 2 years we will be expected to do 600 tons of casting – it will generate revenue of more than 100 Cr
• Inventory correction is likely to get over by Jan 24
• Growth will be broadbased and we will not focus too much on single segment
• Working on Automotive/Aerospace/Defence/Mass tranit systems and pumps/valves
• We do not have the capability to do casting of super alloys
• Replacement cost- difficult to determine as there are intangible factors
• 460 tons production in FY 23, this year we will do 500 tons and FY 25 we will do 600 tons
• With 600 tons we can easily cross 110 Cr
• We receive forecast from customers but it is only valid for one month. they deivate 15-20%
• Contract manufacturing- we have agreements with customers on various terms
• 13 new products are beyond sampling – now pilot batches and we are on verge of receiving bulk orders
• New products are new for customers and hence scale up of these products will happen over next 1-2 years
• Any porject that comes today will take 3-4 years for realizing it’s full potential
• Product basket – we are at 15% in domestic and will be same range this year. There is bullishness in domestic
  market
• Volumes top 2-3 customers – 20-25%
• ISRO can become big client for us not in terms of tonnage but in value. we are working on many future products
  for ISRO
• Margins – still able to sustain in tough environment is creditable
• New facility approvals – some received and some are in process. Total capex of less than 10 Cr
• Refurbished robotic system already in place – it gives us enough legroom to go upto 650 tons
• Realization- many factors go into realization
• Next fixed assets increased due to asset addition of 5-10 Cr. Land and building acquired plus plant and machinery are major components
• Investment casting is very big market and hence we are focusing on it. Sand casting there are many large players
  already there
• Domestic customers – Auto/Defence/Aerospace and locomotives. Large part is Automotive which is for exports
  by Indian players for gearbox or injection system.
• Defense- subsea systems , Aerospace – ISRO and GTRI, Locomotive – certain Bharat Ratna companies
• Timeline for orders- 1 out of 20 enquiries in tooling orders, Samples 15-20 weeks – then pilot batches 9 months to 12 months is typical order cycle
• Chandryan-3 we are indirectly part of the development.
• Process for name change is going on.
• Corporate presentaitons – we give it 6 monthly basis
• Haven’t lost any existing customers with significant value.
• Stepdown subsidiary was acquired by company- through proper process.
• 3-4 years 150 Cr topline very much doable
• For higher volume – lower magin are we ok with that- we are trying to get better margins as it is natural for businesses to look for higher margins
• 10 Cr capex – only marginal capacity addition but it was mainly for modernization of plant and hence important for business continuity
• Rejection rate varies from segment to segment- Aerospace – may be high while for Automotive it may be low
• Investment casting – Aerospace is very large part of large companies like PCC while we do not have it as it requires distinct set up and capability. It is expensive to build the same so we may think about acquiring it rather than building it