Hey, @THE_TECHNICAL_ANALYS did you visit the factory? What’s your review?
This seems a fundamentally good company with strong promoters, excellent working capital cycle, and it has strong tailwinds with metal cycle turning. The only concern I’ve with this company is regarding market size and revenue potential.
A few reports suggest that market size is really small, ~$85M in India and the company is already doing revenues worth $35M, is there room for growth? To check the global size, I found out some other major players like Otto Junker (Germany), Ajax Toxco (US), Ningbo (China) and found out that they have revenues in a similar range or less than Megatherm, which means the company is not only a major player in India but around the world.
If the company is already a major player around the globe, and induction furnace market grows at ~6% (src), where are the future revenues going to come from?
On the positive side, I believe 2 things can help this - promoters and metal cycle. Promoters here have deep knowledge of technology and outstanding relationships which should continue to help the company. And due to metal up-cycle, steel players are going to invest in electric furnace rather than traditional blast furnace due to 2 reasons - improved output and lower emissions. Tata Steel UK has announced plans to build £1.25B electric arc furnace in Wales which is huge.
I’d still love to know more about market size and future revenue potential for the company, if anyone can share their learnings. @Mohit_baid do you have some insights on this?
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