Further deep dive into Orbit Bearing’s numbers: Managerial Remuneration is 22 Cr which means we’re talking about an opportunity in a 27% PBT Industry.
They did a gross margin of 42% (FY23) and a pre tax RoCE of 20.30% (FY23) and 26.20% (FY22) – post managerial remuneration.
Cash Conversion Cycle seems to be 298 days for FY23 – which is what’s dragging RoCEs down despite such high margins.
Property Plant and Equipment was only 89 Cr in FY23 which means they have fixed asset turns of over 7x.
This is similar to Galaxy’s numbers where on a gross block of 20 Cr they do a revenue of 127 Cr.
Not to get ahead of ourselves but assuming a Fixed Asset Turn of even 5x (assuming land is more expensive now) – they should be able to add another 175 Cr of business with Phase 1 of this CAPEX. If we go by the capacity they’ve added, it should take them closer to Orbit Bearing’s numbers (who has a capacity of 10 Million).
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