Nitiraj Engineers Ltd., established in 1989, is one of the leading Electronic Weighing Scales and Systems and Digital Fare Meters manufacturers. Global Electronic Weighing Scale Market Size was valued at USD 8.7 Billion in 2023. The electronic weighing scale industry is projected to grow from USD 9.24 Billion in 2024 to USD 14.2 Billion by 2032.
The company owns the PHOENIX brand. They also manufacture Currency Counting Machines and a range of Security & Automation Products for homes hotels and offices. Currently, the company have 20 branches across Maharashtra, Odisha and Chhattisgarh. The company produces more than 100,000 scales per year.
Promoter:
Rajesh Bhatwal completed his BE in Electronics and founded the company in 1989. He has led the company since it was incorporated had a small area and staff of just 3 people, to a huge manufacturing unit with advanced machinery and a staff of more than 250 people. He owns a 45% stake in the company.
Product Range:
The three broad segments of the company are as follows:
Electronic Weighing Scales: They make up 95% of the revenues. Weighing solutions starting from milligrams to tons include:
- Person weighing scales
- Jewellery scales with 10 mg accuracy
- Tabletop scales upto 30 kg capacity
- Platform scales upto 5-ton capacity
- Crane scales upto 20-ton capacity
- Weigh bridge upto 100-ton capacity are demanded from the market.
The Target Market includes Jewellers, homes, retailers, wholesalers, hospitals and health centres, post offices, banks and paper industries, logistics, dairies, mills and industries, building and construction, Government segment forms a major part of the market.
Currency Counting Machines:
- Cash counting and counterfeit note detection processes are widely required with high speed and accuracy
- PLNC 3|4 – Currency counting machine with counterfeit note detection
- PVC-101 – Mix note value counter with counterfeit note detection is demanded from the market
- The Target Market includes; Banks, Jewelers, Retailers and Wholesalers, Commercial establishments, and Government segments: post offices, railways Petrol pumps, hospitals and others
Security and Automation:
- This segment includes products such as Access control systems, video door phones, audio door phones and remote locks for home security and convenience.
- Wired as well as wireless models are available.
- Hotel RFID locks, Room number plates and power-saving switches.
The Target Market for this segment is Hotels, Homes and Offices. Both commercial and residential real estate are in high demand. We expect to launch new products in this segment, prototyping
is already done.
Vertical Divisions:
Turnaround in Financials in the last 1 Year: Sales have increased, OPM has improved and the company has turned profitable. The inventory days have come down in the last year, leading to a better cash cycle and an improvement in ROCE.
Example of a newly launched product:
What are the future growth drivers?
- The commercial segment under electric weight scales is growing at a huge pace. The company achieved more than 140% growth in revenues from commercial weighing scales in FY24 as compared to last year. The management is expecting revenues to grow by 20-25% on a CAGR basis in the next 3-4 years.
- The company is entering the export market. They had a pilot sale in Germany.
- The company is expanding distribution to six new states. The new states are Jharkhand, MP, Rajasthan, Punjab and others.
- Their Home automation products hold potential. They are planning to enter the Builder market where supply would be in bulk for security and automation products along with new launches. The management expects revenues to grow by 20-25% on a CAGR basis in the next 3-4 years.
- Currently the company is at 50% capacity utilization. Management is expecting to improve it to 60-70%.
- The company is planning to launch 5-6 new products every year.
- The company is venturing into drones. But it’s a new segment and I am not counting it for now. Though, it’s great to see the growth mindset of management.
Risks:
- The company has turned around recently. We will have to wait for a few quarters to confirm the turnaround.
- It’s a microcap and there is not much information available on the company.
- The company is not holding any conference calls.
- Competition is intense in this segment.
- They do not have an online presence on Amazon.
Disclosure: Invested at the price of 286.
Current MCAP: 277 cr.
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