Shivalik Bimetal Controls hosted a conference call on Nov 6, 2023. In the conference call the company was represented by Rajeev Ranjan, CFO.     

Key takeaways of the call

Registered 25% growth in the domestic market. Expect pronounced upswing in the market conditions and thus domestic market growth is expected to sustain going forward.  Although global headwinds may persist into the next calendar year, the company anticipates that the 10%-40% growth range will return post-Q4FY24.  Wider growth range of 10-40% post Q4FY24 is largely as the company expects a minimum growth of about 10-12% on a bad base basis and if market conditions and plans of the company go as per the plans the company can register a growth well beyond 30% with a cap of 40%. 

About 20 million smart meters annually are expected to get produced in the country.

Look forward to exploring a joint strategic partnership with Metalor in India.  The company is currently embarked on the process of establishing a MoU to assess the feasibility of a joint venture with Metalor, a Tanaka group company, which is a world leader in the field of Precious Metals. Metalor, a renowned Swiss company, is celebrated for its expertise in silver contacts and state-of the-art silver melting facilities in several locations around the world.  By conducting a feasibility study, it will assess the value addition this partnership can bring to manufacture and assemble silver contacts. The company hope to analyse how Shivalik’s silver contacts segment can be positioned for substantial volume growth through this venture, as it anticipate achieving greater milestones in this segment. This initiative affirms its commitment to pursue sustainable growth that can open doors to Metalor''s extensive global network. Currently in the stage of pre signing of MoU. Looking at low and medium voltage electrical market.

Seeing more customer engagements in case of exports and that to facilitate export growth.   Americas may see some improvement in h2 but not completely.

Volume mix in Q2FY24 is 61% is Bimetal and 39% is Shunts. In revenue terms Bimetal:shunt is 57:43 in Q2FY24. Upcoming quarter the mix will remain same as that of Q2fy24. Next fiscal the mix may reverse with the share of shunt improving. For shunt to revert back to 50% of volume takes quite few more quarters.  

Capacity utilization of bimetals is currently about 33-34% and that for shuts it about 40%. Shunt capacity is scalable mode involving vendors and suppliers.

Other income  - constitute forex gain about 90% and balance is revenue from small job work.

Focuses on process improvement i.e. automation, focusing on process inspection especially end of line inspection, efficiency/quality improvement such as cut down lead time and reduce rejections. Hope these efforts to result in 2% savings in gross margin.   

Looking forward to expansion of top-line and bottom-line in current fiscal. Though at the middle of global downward trend, what the understood from customer indications that the customers are  investing in capacities and new products which augur well for the company. It hope to achieve its target in next 3-5 years.