TAAL Enterprise – cheap valueations

TAAL AGM FY23 updates from Sept 26th 11am. This was compiled by a fellow shareholder (Yash), posting on their behalf. Thank him for sharing the notes in such a detailed manner.

Chairman speech:

• Engineering design capabilities: company is on a robust growth path.
• Merger of the subsidiary: there will be no dilution since it’s a wholly owned subsidiary. The rationale is to simplify the structure. The merger should be completed by Q3FY24.
• Registered office has shifted to Bangalore.
  Q&A speakers – Rohit Balakrishnan, Ashwin Dsouza, Rupesh Tatiya, Swechha Jain, Keshav Garg, Aayush Agarwal
  Questions answered by MD:
• 3 areas: product design, construction, and infrastructure (architectural) and plant design (work for EPC companies).
• 60+ customers today. Number of customers have grown and business with each customer has grown.
• Largely exports business. 70% US & Canada, 21% EU. Trying to make entry in Japan and Middle East.
• No work for the defence sector in TTIPL.
• Expect to retain the growth rates of the past.
• Margins: built the business in that way. Have been very selective with customers. Margins are fluctuating because on site business has grown faster than offshore business. Over the longer-term margins will smoothen out.
• Invested in sales and marketing team. Will pay dividends in future.
• See good growth in all segments going forward.
• Unlike KPIT are not automotive focussed.
• Hired senior management particularly in the sales side.
• Both the office are operating at full capacity.
• Roughly 690 employees.
• Have master service agreements and then get PO which are short term. Don’t have LT order book.
• Top 1-5-10 customers: 13%-43%-60%.
• Half to 1 million dollar is average ticket size.
• In the EPC space don’t work for end customers. For other segments work with end customers.
• Don’t have any aircraft. Entire business rests within the subsidiary and hence the merger.
• Competetiors: many in Germany and France. Cyient, Axiscades, KPIT to some extents are competitors.
• Recruit people based on orders don’t keep a bench of people.
• 106crs of financials assets: FDs, Investments, Bank Balances are major.
• 45% product engineering, 25% plant engineering, 19% construction, 1% IOT services.
• Subsidiary Amalgamation NCLT Final hearing is 8th November 2023.