P

P

Lord Jesus Christ Says...

“Jesus’s words can replace stress with peace, sadness with joy, confusion with guidance and fear with faith. That’s why Jesus Speaks will not only change your day; it can change your life, your relationships, and your eternity!”

6 Jun 2018

SHARE MARKET--A MULTIBAGGER SHARE FOR INVESTMENT-


SHIVALIK BIMETAL CONTROL LTD.

INDUSTRY OVERVIEW SHIVALIK is India’s leading integrated manufacturer & seller of Thermostatic Bimetal/Trimetal strips, component, EB welded products, cold Bonded Bimetal Strips and parts etc. with an export presence in over 40 countries across the globe. In particular, the Company achieved its targets in the FY 2016-17. SHIVALIK is catered to broad spectrum of applications which includes Switchgears, Energy Meters, Industrial, Electrical applications, Automotive & Electronic Devices. Our growth is directly connected with the other Electrical and Electronics device’s industries. Indian electrical and industrial electronics industry posted 4.25 per cent growth in 2016-17. The industry exported Rs 38,580 crore ($6 billion) worth of electrical equipment in 2015-16 (Rs 35, 276 crore ($5.25 billion) from April to February in 2016-17), according to Indian Electrical and Electronics Manufacturers’ Association (IEEMA), the apex Indian industry association of manufacturers of electrical, industrial electronics and allied equipment. The major growth drivers are low voltage switchgear which has registered a healthy growth of 22% under which MCBs have grown at 9.4% due to revival in growth of realty, infrastructure and other manufacturing industries. Distribution transformer (especially up to 25 KVA – REC range) and energy meters demand has declined by 12% and 10% respectively due to poor off-take from utilities owing to delay in finalization of orders under government schemes such as DDUGVYJ and IPDS. The primary factors that affect SHIVALIK BIMETALS operations comprise: a) sales volume and prices, and b) production costs. The Company derives its revenue primarily from the manufacturing & sale of Thermostatic Bimetal/Trimetal strips, component & shunt resistors. Our Bimetal industry is substantially driven by changes in supply and demand nationally and internationally. As per your company financial data for the FY 2016-17, sales volume consist 52% domestic sales and 48% export sales. The Company’s revenue also depends upon the price of copper & Nickel Alloys in the international markets (especially at LMEs). All Alloys are imported since there are no local suppliers available. The prices of these Alloys are linked to the commodity prices and the prices at the LMEs and they are also impacted by various social, political factors, currency fluctuation, government regulations & policies. Despite lack of momentum in the global economy, uninspiring demand growth in India and liquidity crunch following the Government’s demonetisation initiative, SHIVALIK reported a Strong performance. This is the outcome of its global and domestic strategies that validate the Company’s Will to Win. Annual Report 2016-17 |65 FUTURE OUTLOOK In this business environment, SHIVALIK adopted a two-pronged strategic approach. On the one hand, it looked inwards to create a more competitive and resilient enterprise with clear focus on developing processes, people and a strong performance driven organization culture. On the other, it leveraged the best mix of revised policy and regulatory measures to streamline cash flows and create a suitable platform for continuing business operations efficiently and servicing market opportunities.
On enhancing internal efficiencies, SHIVALIK has adopted a management ethos that focuses on achieving a clear set of objectives. The goals include: • Further enhancing efficiencies in operations across all lines of business segments. • Addressing the cash flow situation by adding new applications in the business, Bimetal and EB Welding, as also charting a clear strategic and financial blueprint for key investments in the new projects. • Translating strategic intent to on-ground commitment of delivering high quality products for all customers. • Growing the order book with a well distributed portfolio across various segments of the Bimetal Industry. • Continuous efforts for cost reductions and optimal utilization of available resources of the company; • Effective management of foreign exchange policy; • Focus on new technologies/applications i.e Solar, HYBRID. • In-house R & D facility for the purpose of product improvement & Development, product diversification, to explore new avenues for its product applications and new product development using same technology; • To become a leader in global bimetal market. Your Company’s product fall in varied applications such as Industrial, domestic appliances, Automotive and Defence. The future outlook of your Company remains positive as your Company is actively working on both the strategic front and the operations front to take advantage of the turning trends which includes Research and Development, improving operational performances, focus on quality, broaden the customer base etc. Opportunities & Threats The Indian economy has showed clear signs of recovery in FY 2016-17. The Govt of India has centralized focus on ease of doing business. In this endeavor it has done away with various complicacies in business and taking various reforms like the biggest historical tax reform in Indirect Taxation. The GST is stated to be a game changer and promises a lot to the Indian economy. It is expected to boost Indian GDP growth by 1.5 – 2%. The long-term opportunities remain positive in the global bimetal market in the coming decade, the main focus would be on enhancing efficiency and productivity, enhancing market share and on innovation, driven by changing customer demands. Price sensitivity of the Indian consumer, cost optimization needs of manufacturers and increasing focus on environmental concerns will drive critical changes in the market. With the increase in demand for the Generation of Electricity & due to the day to day enhancement in the power distribution projects, we cannot negate the fact that the long-term potential of the Indian Bimetal industry remains bright. The opportunities for the industry have been identified and efforts are being taken by both public and private entities to achieve sustainable growth. Threats: Your Company may face the following threats for doing future planning: our growth is based on several parameters such as overall GDP growth of India, currency movement, inflation, existing trade agreements, consumer sentiments, potential government consumption, existing government policies, investments, manufacturing entities, and type of value addition in India. Risks & Concerns Risk Management Policy has been adopted by the Board to review and mitigate risks relevant to environmental, operational and business risks to safeguard its interest. It ensures sustainable growth by implementing a proactive approach in 66| Shivalik Bimetal Controls Limited reporting, evaluating and controlling / resolving risks associated with the business of the company. In order to achieve this, the Policy establishes a structured and disciplined approach to Risk Management, including the development of the risk areas, so as to guide decisions on risk related issues. The Board has delegated responsibility of overseeing Risk Management framework to the Audit Committee. Audit Committee of the Company is regularly monitoring the environmental, operational and business risks. In addition to this, the company has internal audit systems which assesses the effectiveness of internal controls, risk identification and mitigation processes prevailing in the company. Your company has also formulated a Foreign Exchange Policy to mitigate the risks attached while dealing in fluctuations in Foreign exchange in both Imports as well as Exports. Audit Committee of the Board of Directors also reviews the internal audit reports and takes appropriate actions w.r.t deviations, if any. The various heads of operations are having continuing interactions and communications at periodical intervals with the marketing head, employees and other stakeholders. They keep themselves abreast with the developments in the market, products, competition and other relevant areas. Financial Performance (A) Standalone financial performance is as under: Equity Share Capital: The Equity Share Capital of the Company as on 31st March, 2017 stood at ` 384.03 Lacs. There was no fresh issue of capital during the year. Finance Cost: Finance Cost for the financial year 2016-17 is ` 247.65 Lacs as compared to ` 389.90 Lacs in the previous year, as such there is decrease by 36.48 % in the current financial year. Turnover: The Company’s sales and other income has increased from ` 10,654.91 Lacs to ` 12,763.53 Lacs, an increase of 19.79% over the previous year. Net Profit: Net profit available for appropriation for the year 2016-17 stood at ` 911.00 Lacs as compared to ` 411.44 Lacs in the previous year. (B) Consolidated financial performance is as under: Equity Share Capital: The Equity Share Capital of the Company as on 31st March, 2017 stood at ` 384.03 Lacs. There was no fresh issue of capital during the year. Finance Cost: Finance Cost for the financial year 2016-17 is ` 304.75 Lacs. Turnover: The Company’s sales and other income during the year is ` 13,962.40 Lacs. Net Profit: Net profit available for appropriation for the year 2016-17 stood at ` 878.96 Lacs. Earnings Per Share (EPS): The Company’s Earnings Per Share (EPS) during the current year is 4.58. Internal Control System and their Adequacy SHIVALIK has an adequate system of internal control in place which has been designed to provide a reasonable assurance with regard to maintenance of proper accounting controls, monitoring of operations, protecting assets from unauthorized use or losses, compliance with regulations and for ensuring reliability of financial reporting. Company has documented procedures covering all financial and operating functions. Company has robust internal audit programme, where the Internal Auditors, an independent firm of chartered accountants, conduct a risk-based audit with a view to not only test adherence to laid down policies and procedures but also to suggest improvements in processes and systems. Internal audit observations and recommendations are reported to the Audit Committee, which monitors the implementation of such recommendations. Occupational Health & Safety SHIVALIK gives great importance to all the matters related to Health, Safety and Environment and ensures compliances of all statutory regulations. Training of employees on emergency response, fire fighting, rescue and first aid are some of the regular features at manufacturing sites. Annual Report 2016-17 |67 Occupational Health & Safety is an area concerned with protecting the safety, health and welfare of employees engaged in the company. The goals of occupational safety and health programs include to foster a safe and healthy work environment. Occupational Health & Safety has been recognized as an integral and key part of the Company's Business Process. The management believes that people working with the organization are of key resource for the success of the Organization. The sincere efforts put in by the employees have translated in to Quality improvements, Productivity improvements and Cost reduction etc. Management firmly believes in developing and nurturing its human resources and improving their talents which subsequently help in the growth of the Company. Proper care is taken for safety, health and welfare of the employees. The Company ensured employee safety through investments in pollution mitigating equipment, the selection of safe processes, adequate safety training and provision of safety equipment. Our aim is to remove unsafe situations and practices by any/all pre-emptive steps required. For the safe return of the employees to their homes all precautions are taken to avoid accidents. Human Resource and Industrial Relations Your Company maintains very cordial relations with its customers and suppliers. All out efforts are made to quickly resolve all outstanding issues beforehand so that they do not escalate into major disagreements. Your company has earned a good standing over the years and there are zero contentious issues pending as on date. The organization maintains harmonious relations at all levels within the company and employees are well motivated round the year to meet the goals set for them. Your Directors wish to place on record the deep sense of appreciation for the contributions made by the employees. Your Company is continuously striving to create appropriate environment, opportunities and systems to facilitate identification, development, and utilization of their full potential and inculcating a sense of belongingness. Your Company’s industrial relations continued to be harmonious during the year under review. Cautionary Statement Statements in the “Management Discussion and Analysis” describing the Company’s objectives, projections, estimates and expectations or predictions may be’ forward looking statement’ within the meaning of applicable securities laws and regulations. Actual results could differ substantially and materially from those expressed or implied. Important factors that could make a difference to the Company’s operations include economic conditions effecting demand/supply and price conditions in the domestic and overseas markets in which the company operates, currency (forex) fluctuations, changes in the government regulations, tax laws and other statutes and other incidental factors.

This share is a multibagger for investing minimum 3 years. Its past 3 year performance is more than average. Again expecting capital appreciation. Consult your analysist  and buy the shares for long-term  investment.

No comments:

Post a Comment