Notes from caprize investment managers:
Funds raising Plan is to invest 100cr over the next 18m for capex with possible asset turn of 10x. The company aims to achieve a turnover of Rs. 1,500 crores to Rs. 2,000 crores per annum in the next five years, with EBITDA margins of 20% to 22%. FY23 rev stood at 322cr.
What does the company do?
Manufactures hardware for launch vehicles (SSLV, PSLV, GSLV); equipment for nuclear reactors; marine gearboxes for naval frigates, corvettes, submarines, missile hardware/launchers, etc
Key Segments
Aerospace: Solid Propellant Motors, Nozzle End Segments, and Strap-On Motors
Missiles: Motor-casings for tactical and strategic missiles
Defence: Mobile Missile Launchers, Mobile Bridges, Containers and Launchers
Nuclear: Heat Exchangers, Calandria, End Shields, and Shield Tanks
Industrial products: Gearboxes, Castings, Centrifugal Machines and Crushing & Grinding Equipment
Key Clients: ISRO, BDL, HAL, DRDO, NPCIL
With the massive Make-In-India push along with rising intensity of public-pvt partnership in defense, we believe the company could be on the verge of a MEGA turnaround with major push coming from ISRO/Aerospace and the Defence/Missile program.
What to monitor?
Order Book – 822cr as of last qtr, 1500cr of offers in the pipeline. Potential: 3x with ISRO OB, 2x with Missiles, 3x with NPCIL
Debt reduction – Current total debt 478cr (LT 261cr)
But how does one evaluate a company with highly checkered past, limited/narrow public information/understanding.
While the past performance has been abysmal (300cr+ cumulative losses), Definitely a watchlist candidate for the next 4-6 quarters!
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