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Luke 5:31, 32 And Jesus answering said unto them, They that are whole need not a physician; but they that are sick. I came not to call the righteous, but sinners to repentance.

7 Jul 2019


SHIVALIK   BIMETAL CONTROLS LTD—Please see the writings of two investors/If you are interested read it and apply through your consultant.

Shivalik Bimetal Controls Ltd. (SBCL) was incorporated on 18 June 1984 and converted into a Public Limited company on 14 February, 1985 with the purpose of setting up manufacturing facilities for Thermostatic Bimetal Strips. This was the first plant in Asia outside Japan to undertake manufacture of this sophisticated item. The plant is located at Chambaghat, District Solan, Himachal Pradesh.
The cost of setting up the project was part financed through a term loan from a consortium consisting of Industrial Finance Corporation of India Ltd. (IFCI), Industrial Credit and Investment Corporation of India Ltd. (ICICI) and Industrial Development Bank of India Ltd. (IDBI) with IFCI in the lead.
The Company has established itself as the largest manufacturer of Thermostatic Bimetal Strips in India. The Company's market share in the production of Thermostatic Bimetal Strips is above 65%. The Company also manufactures components which use thermostatic bimetal strips.
In the existing unit, a new High Precision Rolling Mill and other equipments have been added. This has increased the roiling capacity substantially. The Directors are pleased to report that the Mill has started its commercial production on 29th May, 1997.
New Industrial Undertaking (Unit-II) :
The company has set up a New Industrial Undertaking called Shivalik Bimetal Controls Ltd. - Unit-II in Himachal Pradesh, for manufacture of bimetallic and other components. The setting up of the Unit-II in Backward Industrial Area has been approved by the State Government and other concerned authorities. This unit has commenced commercial production on 30th June, 1997.

-Shivalik Bimetal Controls has given the Bonus in the Ratio of 1:1
- Company has splits its Face value of Shares from Rs 10 to Rs 2.
- The Board of Directors have declared interim dividend @ 12.50% on Equity Shares for the financial year ending.
- The Board of Directors have declared an interim dividend @ 12.50% on paid up Equity Share Capital of the Company for the financial year ending.
- The Board of Directors have Declared Interim Dividend @ 15% on Paid up Equity Shares for the financial year ending.
- The Company joined hands with ArcelorMittal Stainless & Nickel Alloys of France and DNick Holding plc on behalf of Auerhammer Metallwerk GmbH of Germany to form a new venture to manufacture & market clad metal products across the world.
- The Board of Directors have declared Interim Dividend @ Re. 0.20 per Equity Share or 10.00% on Paid up Capital for the Financial Year ended.
- The Board of Directors have declared Interim Dividend @ Re. 0.20 per Equity Share or 10 (Ten) on Paid up Capital for the financial year ended.
- The Board of Directors have declared 2nd Interim Dividend @ Re. 0.20 per Equity Share on 10% on Paid-up Capital for the financial year ended.
-Capt. Jitender Singh Mann and Lieutenant General pradeep Khanna has been appointed as a additional Directors of the company.
-Mr. S. S. Sandhu has been appointed as a Chairman and Whole time Director of the Company.
-Mrs. Harpreet Kaur has been appointed as a Independent Women Director of the company.
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Many parts of this bimetal story make it a promising bet for 2019

Bulk of the company’s raw material is nickel-based alloys and other alloys.
By Dhiraj Dave

I like Shivalik Bimetal Controls as an investment idea for 2019.

Shivalik Bimetal Controls is engaged in the business of manufacturing & sales of thermostatic bimetal/trimetal strips, components, EB-welded products, cold-bonded bimetal strips and parts.

Promoted by SS Sandhu and NS Ghumman and incorporated in 1984, the company exports its products to over 50 countries around the world.

Shivalik caters to broad spectrum of applications, including switchgears, energy meters, industrial use, electrical applications, besides automotive & electronic devices. Its revenue growth is dependent on electrical, electronics and automative Industries.

Despite single-digit revenue growth in main end-use industries in India, Shivalik reported 19 per cent CAGR growth during FY15-FY18 by improving product mix and increased penetration in export market. The growth in exports could be attributed to high research focus and superior quality of products achieved through experience in some processes. The company’s research facility was approved by Ministry of Science and technology in as early as 2002.

During FY11-14, the company faced major setbacks as supply to colour picture tube (CPT) part, which contributed around 30% of its revenue in FY11, dwindled due to a change in technology resulting in virtually no demand for CPT parts. The share of CPT parts in Shivalik’s total revenue fell to almost nil (0.5 per cent of revenue) in FY14. In order to overcome the challenges, the company managed available cash flows prudently (curtailed dividend to nil from around two annual dividend payments a year in the past, delayed proposed capex for expansion and reoriented production facility manufacturing CRT parts to manufacture new products under development).


Consistent efforts to improve new products and frugal cash flow management rewarded the company. New shunt developed by the company found its usage in battery management system for electrical vehicles and that resulted in improved share of shunt in total revenue.

The management is also venturing into niche applications like overloaded protection and thermostatic Bimetals of various home appliances through JVs. It has also announced capex plan for manufacturing diverse products to meet growing demand of existing products and new products with applications in newer fields like smart meters and home appliances.

When the company was going through a rough patch, directors had foregone 70 per cent of their entitlement, amounting to Rs 62.64 lakh in director remuneration and opted to avail only 30 per cent of the increased remuneration as approved the central government for the FY 2011-12.

Further, in FY14, due to constrained profitability, the management voluntarily proposed to work on the same salary for next three year.

However, in FY18, when the company resumed on profitable path, salaries of promoter directors increased to Rs 3.63 crore against a net profit of Rs 15.99 crore, which was higher than total dividend payment of Rs 2.77 crore during the year.


The company has few joint ventures like Checon Shivalik Contact Solutions (Inlay manufacturing facility with Checon Corporation as equal JV Partner) and Innovative Clad Solutions (world-class manufacturing facility in field of clad metal with Aperam Group as major partner).

Bulk of the company’s raw material is nickel-based alloys and other alloys. A significant quantity of input requirement is imported, which results in input price volatility risks. The company, however, mitigates same by having entering into contracts with customers, who provide for passing of any input cost change. Further, more than 50 per cent exports work as natural hedge against exchange rate movement on raw material cost.

At trailing 12-month P/E of 20 times, the company is reasonably valued in view of the expected growth. However, given the innovative and diversified product mix, prospect for higher revenue growth may provide scope for price appreciation in the medium term.

(Dave, a Mumbai-based value investor, holds shares in the company. Thus. His views may be biased. He is not a Sebi-registered investment adviser, and this writeup should not be seen as investment advice. Please consult your financial investor before making any investment decision.)

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