Find enclosed my notes from Disa India AGM. Please note that there is possibility of communication error at my side.
Revenue outlook:
The company’s topline has grown at 5 times GDP growth. Expect same growth rate to continue. Forging industry in India is attracting many new players as well as many established players are also looking at expansion, which would drive demand for the company products. The company is leader in Vertical technology and has almost more than 50% market share. In Shot blasting machine, it is improving its technology and has around 20% market share. The Flex technology is giving good output in shot blasting.
Disa product account for 65% of share, while 15% is from shot blasting and 17% is filters. Automotive OEM account for 70% sales while non-automative segments account for balance 30% sales which is mainly driven by Infrastructure spending. The company is also getting parent support and supplying to US market and European market.
The company intend to provide better services to customers by reaching near their location. In order to achieve these objectives, the company appointed 5 distributors at national level which cover 9 locations. Margin in After sale service are higher than margin in equipment supply.
On Digital side, the company in touch with most of large players. All new equipment it supplies now are digital ready. Nearly 80% of products are digital ready. The company expect it is long journey to digitalised all equipment. The large players are still reluctant, while small players would wait for large players to digitalised and then decide about their way forward.
In Aluminium die cast, the company currently does not find merit to start equipment manufacturing due to limited demand. In long term, once Indian market offer scale, it would commence aluminium diecast equipment. Meanwhile, it would continue with prospective customer and import equipment from group companies and meet the Indian customer demand.
Capex:
The company would not hesitate to do capex. With current set up, it can revenue topline of Rs 450 cr. The company is not selling equipment, but it provides solution to client requirement. It has increased outsourcing of non-essential activity. The increase in production not about only company increasing capacity, rather, the whole ecosystem including vendors also need to scale up capacity.
Disclosure:
I have invested in the company and hence my view may be biased. I may increase/reduce and exit from investment without informing forum. I am not SEBI registered advisor. I am not suggesting any investment action to reader.
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