Meson Valves : ‘Make in India’ player

A quick Google search : ‘Ship valve manufacturer in world’

Meson’s name comes 4th ( sometimes 6th) but, always features in the first page.

During the defence expo 2024 in Pune, I happened to meet Mr. Kishor Makvan, Executive Director

handling operations at Meson valves. I was surprised to find the Naval chief Mr. R Hari Kumar having a 20min. discussion on the second day of the expo.

I waited for the chief to go and then had a word with Kishorji. Since I hail from an instrumentation background and having

worked with a refinery two decades back I discussed the technicalities of valves. Naval vessels require non-ferrous valves for which Meson has expertise.

This company was incorporated in 2016, the company was ‘Sander Meson India Private Limited’ and the assembly line was

started in Goa.

In 2019 the name was changed to ‘Meson Valves Private Limited’ and in 2023 it was

changed to ‘Meson Valves Limited’.

In a very short time they received ISO 14001:2015 , ISO 9001: 2015 and ISO 45001:2018 . From 2022 onwards, they have moved their assembly line

to Chakan MIDC, Pune.

Meson had raised Rs 11Cr for Plant and Machinery, 11Cr. for general working capital when their IPO came in Sep. 2023. They have bought 3 machines from Jyoti CNC and

Sheetal Lathe machines and some other CNC machines are about to be delivered from Jyoti this year.

Moat:

a. TYPE approval: These guys have got TYPE approval, meaning that certain valves dont need repeat inspection / testing so the delivery is faster.

Testing / inspection process is time consuming and involves multiple parties including defence personnel

as well.

b. Ability to pass on costs to raw materials:

Since they are specialised into manufacturing of non-ferrous valves the raw material price may fluctuate due to the current geopolitical scenarios.

Their customer also acknowledges this and hence they are able to pass on

the price to the customer since they have limited competition in the segment they operate.

c. Backward integration with foundries:

Since the Meson team is experienced with the entire process and workflow of valve manufacturing/ assembling, they have experienced that margins can

be significantly improved if backward integration is done with foundry.

They are in advanced stages of having a fully functional backward integrated site at their current location in Pune, which would help them in faster and efficient delivery to their clients.

testing and

inspection

d. Spares business

This is a ‘no brainer’ considering that the entire ‘valve ecosystem’ needs a lot of parts in order to be in working condition. Meson is in a good condition

to source the spares in a good quantity.

Competitors

L & T valves, Malhar, DelValves and GDPA.

Meson is a dominant player in Hull and triple offset valves owing to the teams’ technical expertise in this field since 19 years.

For Meson, the testing and inspection on time is

not that tough it seems because of its location in the Dehu cantonment area. Armed forces since the last five years are working like a private company much alike the previous years and even they understand the criticality of on-time inspection and testing for timely delivery of

components. Meson being in Pune, can source a lot of valve components like actuators and from other players. These sourced products are low margin products so manufacturing them doesnot make sense. akin to Maruti not manufacturing tyres,seats etc.

That makes their delivery faster so that they can focus only on what they are specialized in. They don’t need to pay any royalty to their parent company. Meson’s global presence has opened doors for them to do business worldwide where due to the current geopolitical

instability, more defence vessels are being ordered.

The R&D done at their Pune centre gives them an edge over their competitors to build niche and valves for submarines and defence ships.

they have exclusive contracts with foundries with whom they work.

This makes it difficult for any other vendor to give finished components matching Meson’s quality

Future Business lines:

a. Waste Water Treatment

Management has extensive experience in water treatment

Especially for defence premises, there is space for specific vendors who do water treatment and create solutions for challenges face by the military for water

availability at critical locations

Meson valves is exploring various solutions on waste water treatment and working on possible ToT to explore this space

water treatment and hopefully something positive should come in the coming months, as per their sales team estimates.

Order visibility:

Almost all the major PSU shipyards have significant defence vessel orders from the Govt. of India for the next 4-5 years. And looking at the Geopolitical situation and need of Indian Navy, the demand for Naval ships will increase, with good focus on

exports of naval ships.

Vessel costs vary from over 100 cr to sometimes 20000 cr depending on complexity of the ship.

Meson valves with high quality, certification, and high end technology combined with possible Value added services in Valves , has a very good chance to

bag critical and major orders, for which the delivery time could be between 1 – 3 years and this time would ultimately decrease as they do backward integration.

Their focus is also to integrate valve related components like actuators, filters etc for better service to end user.

Aircrafts

For aircrafts, they are developing certain critical valves for which R&D is currently is going on

Location benefit:

Being in Pune, they can source a

lot of valve components like actuators and from other players to make delivery faster.

Chakan MIDC starts with the defence area of Dehu area where Munition India and Ordnance depot is located.

‘Defence’ is in the air as one enters the MIDC area.

Value added services:

Meson is planning to provide Value added services in a partnership with

NIBE Ltd. These two companies are located at a distance of just 5Km from each other. A greenfield vessel production requires a lot of manpower

The shipyards need to complete defence vessels on time for

which they have a limited number of contractors.

Meson plans to work at the site providing value added services for a defence vessel on piping systems along with the valves. This is a different category of the business for which the potential is huge and they have seen a

positive mindset of the yards in this business aspect.

There are a lot of components in a defence vessel which are ‘plug and play’. Meson team prepared a solution for those components and given to the yards for the approval so that a vessel delivery can be made faster

Financials:

The current financial figure for H2 may surprise the investors.

Current visit’s purpose was only to do the due diligence of the work they do

As per my assessment, Meson’s promoters are more than capable to scale the company to newer heights.

My views can be biased. I am not a SEBI RA.

Attached below is the video of the Meson facility.

Meson Valves : A ‘Make in India’ valves player

@LarryWink
Please dont tag me for usless posts or Questions
This is business comversation thread and not a speculative whatsapp group where you get updates every now and then
Posts if you’ve some value that can be added to insights
Unless you have any value that can be added please dont posts with such childish emojis
Business is still same
Cranes are still same
Warehouse are still same
Only catalyst that had been added from the time i started this thread till now is 170 crores of capex and possiblity of margin expansion
Hence posting every alternate day is waste of everybody’s time
And it makes hard for a person and quite frankly annoyed who’s going through old posts to understand the business to see such emoji cluttered posts with 0 to -ve value addition

Regards
Mann

Just sent a mail to investor relations seeking the reason behind multiple postponements, will update the group once I get a reply.

NSE 250 qty AVAILABLE @4200

DM: WhatsAppನಲ್ಲಿ ಹಂಚಿಕೂಳ್ಳಿ

Anyone has any idea interms of – At the time of listing of a stock from SME board to Mainboard, is there any circuit limitations?

Also, as it lists on Mainboard and stock price already ~80-100% up in last couple of weeks, will it be eligible for the ASM categorization or not?

Would help if someone can share more info on ASM viz. From where we can get an idea of –
a) Stocks about to go in ASM
b) Stocks about to come out of ASM
c) Stocks about to have Circuit filter revisions

I have seen the lists (excel files) circulating where the stocks coming out/going in of ASM are circulated but source is something I am not aware of for both NSE and BSE.

While there are the guidelines of SEBI around this, it appears quite complex to me to understand and identify the action accordingly. However, I have seen a drastic movement whenever the stocks goes in or out of the ASM list as it has big impact on the trading qty. and margin play during such days.

Discl. – Invested in this script from lower levels.