I met Shivalik in Electronica India last week in Bangalore. Spoke to Kanav and also a sales manager. Please ignore if some of it is basic:
Bimetals – risk of technology – yes, we are also hearing about electronic relay which will give better control and efficiency – for example – in bimetal, if the MCB is tripped, you will have to switch it on manually but in case of electrical relay technology, you can control it or set logic for it. Electronic relays are expensive, so the transition will take a long time. Even otherwise, high volume products will continue to use bimetallic relays.
EBW Resistor – no one can make these in India – one electron beam welding machine can cost 15 to 20 crs, we initially bought 1 each from different OEMs – UK, Europe and US. We have some 10 EBW Mcs now. The last few we made it in-house with base components. You just cant buy a machine and start making shunt resistors. It will take 10 years for a new competitor to get to the scale where we are. If not, anyone would be making it now.
Almost all PCBs which measure/convert/switch current will have standalone shunt resistor mounted on the PCB. Based on application, the value of resistor can vary from 10 Rs to few 100s. Most EMS players buy resistors from us.
Permanent Magnets – very long and good relationship – I am their account manager – the resistors we sell to them start from 10 Rs to 90 Rs – they will not get into what we are doing, we will not get into what they are doing – we are good in EBM which we acquired through our legacy business – they are good in magnetics.
Vishay – they make their own resistors but also buy from us. They will not put up capacity in India unless they see enough volumes. India is small for them. They would rather buy from us as shunt is a not a standard product. It has to be customised for application. More than 50% of our capacity is customised for specific clients.
Reason for guidance of 1600 Crs topline – immediate 12 months, we get framework agreements from clients so that we can buy raw material but companies also give projections for next 2 – 3 years. So our guidance is based on inputs from clients.
All global players are sitting on inventory and hence ordering has slowed down. We expect things to normalise only towards middle of next year April onwards. (Many casting and forging players also said in AGM that inventory will normalise only from January 2024)
Growth will be low for FY24. But FY25 and FY26 will be good.
Smart Meter – shunt might cost Rs. 50- 100 and silver contact might cost Rs. 50 to 100. So overall Rs. 150 per meter. If 2 Cr meters will be installed every year, it gives us 300 Cr revenue opportunity. We will be supplying to players who make the relays like Gruner. No one makes all the components needed for a smart meter in India. Most of it is being imported by Genus and others currently. Some components like chip, India doesn’t have the capabilities. Govt mandate to make everything in India in few years. They have given timeline. While orders have been received by the likes of Genus, we think the delivery will take at least 12-18 months (the manager wasn’t very bullish for the short term) as we are still in prototype stage. Ecosystem is not ready. But big opportunity once it starts.
No one makes the copper grade we need in India. So we import almost all of our copper.
Kanav had to catch a flight and I had to leave too. I couldn’t ask abt EV applications. Will try talking to the Key Account Manager for PML.
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