- Industry scenario is quite robust. There are new entrances, reliance is getting active in food space. Unilever with GSK business. Overall optimistic
- Competition still largely exists from European Markets
- I did some scuttlebutt analysis by visiting foodtec expo. Swiss, German and Italian machines are expensive as compared to Indian brands by 35-45% premium basis.
- Food processing machines industry indeed witness’s customer stickiness. Due to the stickiness, certain parts of market have been captured by players and it is hard to win competitor’s customers. E.g. MDH has been captured by Axtel, Goldiee has been captured by Rieco. (Both MDH and Goldiee are into Spices)
- From our interaction with manufacturers from India, Axtel is known to be leader or brand in what it does. There was a positive review that they are old established players in India who is competing with European counterparts.
- For spices, these new companies who only Focus on one type of machines, do not do cryogenic as it is expensive and only big clients demands it. So, for cryogenic you’ll have to go to players like Axtel
- Overall, the company has a potential to double its revenue in 2-3 years and also its profitability. But one needs to keep in mind that quarterly performance can be volatile depending on the order execution phase. With healthy balance sheet, probability of margin expansion with ramp up in capacity utilisation and robust industry demand scenario, the company is expected to perform well.
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