Analyst Meet / AGM     10-Mar-24
Conference Call
Shivalik Bimetal Controls
North American shunt demand to pick up from second half of CY2024

Shivalik Bimetal Controls hosted a conference call on Feb 9, 2024. In the conference call the company was represented by Rajeev Ranjan, CFO and Kanav Anand, Head of Sales & Marketing of the company and Sumeer Ghumman, MD of Shivalik Engineered Products.

 Key takeaways of the call

Reported growth in sales for Q3FY24 and 9mFY24 despite facing moderated market demand Shivalik Bimetal Controls. 

Metal prices will have impact on the sales price and the realization value of the company. Easing of commodity prices in last 1 year have its impact on sales and realization.

Sales of Thermostatic, Bimetal, Trimetal segments in Q3 FY24 and 9mFY24 was up by 22.22% and 22.10% respectively. This growth, particularly in the Asia region, positions it well in the global electrification landscape and reflects the effectiveness of initiatives of the company.

About 60% of the total Shunt business is into automotive applications. Then about 13%-15% goes into metering applications and close to about 8%-10% is into energy storage and the rest is basically miscellaneous and other applications.

Almost 65% of  Bimetal business comes from switchgear and circuit breaker application,    about 15%-20% from  appliance business, 8% from gas metering applications and rest from other applications. 

Shunt has a little higher margin  over that of   Bimetal. So lower gross margin is largely to do with product mix with increased contribution from Bimetal. In the last three quarters  growth was largely from Bimetal rather than Shunt. The ratio of Shunt:Bimetal is 45:55 compared to last year where it was 49:51.

Domestic shunt business is witnessing the benefit of growth of smart metering. Expect the strong demand from smart metering to   grow in 2024-25 as well.   

On Shunt and the Bimetal side the company is working at a capacity utilisation of 38% and 39%. So don’t have any capacity constraints as far as shuts/bimetal but it has capacity constraints as far as silver contact business.

The new Himachal silver contact facility is almost in ready stage and the plant should be functional may be in another 5-6 months.  The new plant can give a peak revenue of about 250 to 300 crore.



On demand side, the numbers are growing pretty strongly in case of Asian & European markets but the North American market demand is muted for the last one year. But if that comes back, the company is confident of achieving the previously projected numbers.  The shunt demand is going to start picking up from second half of the year and already seeing a lot of customer engagement happening right now on the schedules and the forecast, the numbers that are coming forward.  

On the Bimetal front, lot of demand growth coming from domestic market with lot of   emphasis has been on infrastructure, up-gradations and improvements. The strong growth is expected to continue for next couple of years even though there will be some impact for couple of months due to general elections.

The 10-40% revenue growth guidance is largely as the automotive Shunt requirement specifically of North America is weak there by leaving the overall growth at about 10-12%. Even if the market situation doesn’t improve in case of NA automotive Shunt demand, the company see its revenues still improving in the near future. The North American market is expected to rebound in second half of CY2024.   And if that does rebound and the other holds up at current level the greater growth numbers is very much a possibility.

On contact side, the current EBITDA margin is about 11%-12%  and the company expect margin improvement to the tune of 1.5-2% with new plant coming into operation as it is more efficient plant set up with large capacity unlike the existing plant which was built organically over a period of time.

The gross margin for Bimetal is somewhere in between 44-46% and for  Shunt   it is somewhere in between 48-52%.

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