Academic Research Project- Not a Recommendation

Equity Research Report

Shivalik Bimetals Controls Ltd
Dominant Strategic Player
About the Company Recommendation : XXX
CMP : INR 575
Shivalik Bimetals Ltd (hereafter referred to as ‘the company’ or ‘SBCL’) Promoted
by Manjit Kaur and NS Ghumman was incorporated in June ‘84. The Company is Target Price : XXX
engaged in the business of manufacturing & sales of Thermostatic Bimetal /
Trimetal strips, components, Spring Rolled Stainless Steels, Electron Beam Stock Data (as on Jan 15, 2024)
Welded Shunt Materials (Strip & Finished Components), Cold Bonded Bimetal
Strips and Parts, Snap Action Discs, CNC Formed Coils of Bimetals / Trimetals etc. NIFTY : 21,894
52 Weeks H/L (INR) : 750/360
The Company is specialized in joining of materials through various methods such
as Diffusion Bonding/Cladding, Electron Beam welding, continuous brazing and Market Cap (INR Crs) : 3376
Resistance Welding etc., and offers precision manufactured components specific O/S (Crs) : 5.76
to the application requirements and is a single vendor to many prestigious OEM’s
(Tesla, BYD) and have met demands set by multiple large global organizations. Dividend Yield (%) : 0.20%
The products find application primarily in manufacturing of Switchgears, Circuit NSE Code : SBCL
Breakers, Automotive, Energy Meters and various other Electrical and Electronic
devices.
Relative Stock Performance- 1Y
The company has a plant at Chambaghat (Solan Distt.), Himachal Pradesh, to SBCL Nifty 50

manufacture thermostatic bimetal strips (inst. cap. 80 tpa). This was the first
plant in Asia outside Japan to undertake the manufacture of such a sophisticated
item.

Valuations
The company has posted growth of 7% in top-line during Q2FY24 and
expects to grow at a CAGR of 24%. The consolidated EBITDA Margin
stands at 25% in Q2FY24, which has remained constant from the 23 23 23 23 23 23 23 23 23 23 23 24 24
2/ 3/ 4/ 5/ 6/ 7/ 8/ 9/ 0/ 1/ 2/ 1/ 1/
previous quarter, however increased by 200 bps on YoY basis. The 01
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Gross Margins of the company remained constant at 50% on QoQ as

well as stood at 47% on Yearly basis. Absolute Returns
The company has achieved Q2 operating revenues of INR 112 cr. The 6 Months : -19.24%
PAT for Q2 is 18%, which is constant as compared to Q1FY24. In India 1 Years : 46.42%
SBCL dominates 85-90% market share in Bimetals and 16% share
globally. The company enjoys 12-13% market share in Shunts and 5 Years : 586.76%
aims to increase to 18%.
The stock currently trades at a P/E of 43.8x. Based on EPS multiple Shareholding Pattern (as of Sep 2023)
method, the 12-month price target is Rs. 710, an upside of 24% from
current levels. Promotors : 51.09%
FII : 4.18%
Investment Argument
DII : 1.45%
• SBCL acts as a 3-way proxy player for Electric Vehicles, Smart Meters and Public : 43.28%
Energy Management Systems (EMS). All the three industries are expected to
grow at a double digit CAGR till FY2030.
Financial Summary
• SBCL’s Shunts and Thermostatic Bimetals play a crucial role in EV, smart In INR Crs FY23 FY24E FY25E
meters, Switchgears and electrical appliances. Globally, the use of switchgear
and electrical appliances is expected to surge from Rs 16,000mn to Rs
Net Revenue 4704 5700 7340
28,000mn till FY2030.
YoY Growth % 45.19% 21.17% 28.77%
• The shunts are integral to battery management systems in EV and Smart EBITDA 1089 1263 1609
meters. The global market in shunts is expected to grow from Rs. 18,400mn EBITDA Margin (%) 23.15% 22.16% 21.92%
to Rs. 52,000mn till FY2030. PAT 791 859 1097
YoY Growth % 43.82% 8.60% 27.71%
• The company has completed its bulk capex of Rs. 700-750mn post FY21 and
plans to do minimal maintenance capex of Rs. 200-250mn in coming years. ROE 27.6% 28.7% 26.10%
The company is confident to quadruple its FY23 topline of Rs. 4700mn to EPS (In INR) 13.73 14.9 20.59
16000mn with its existing infrastructure. EV/EBITDA 27.47 28.57 17.67

• Currently SBCL faces strong sectoral tailwinds and has no similar like-to-like
peers. Prepared by: Atharva Belhekar
 Academic Research Project- Not a Recommendation

Shivalik Bimetals Controls Ltd

Investment Rationale Exhibit 1: Electron Beam Welding Machines

Technological Leadership Status

• There are only four players globally who can manufacture low
ohmic shunts using Electron Beam Welding (EBW) technology.
SBCL is one of them. Shivalik has one of the largest capacities in
the world for Electron Beam Welding (8 EBW machines- each
EBW machine may cost currently up to 200Mn). SBCL also
specializes in manufacturing 77 grades of bimetals using the
diffusion bonding process. SBCL specializes in customizing
products and providing tailormade solutions for their
customers.
• The top management of Shivalik has an in-house metallurgy
knowledge base of over 30 years. This is an edge over most of
its peers.
• Shivalik has in-house R&D and customization of machines. EBW
machines and customized & improved to yield maximum
productivity. The company has a history of adding 1 product
SKU in its product base every year.
Source: Quarterly presentation, Company Analysis
Strong Tailwinds from End-user Industries
Exhibit 2: Smart Meter Opportunity
• The company’s products are used. In industries like Switchgears
(Bimetals & Contacts), ICE/EV automobiles (Shunts), Smart
Meters (Shunt Resistors & Contacts) & Power storage modules
(Electrical contacts & Shunts).
• Electrification, Smart Grid & Smart Meters- Due to Government
Policies like Smart Meter National Program (SMNP), the Indian
Smart market is expected to grow at a CAGR of 9% from FY23 to
FY28. In this SBCL’s current sensors, Shunt resistors and silver
contacts will play a crucial role.
• Electric Automobiles- Electrification of automobiles have
increased recently due to shift of global focus towards
improving efficiencies, reducing carbon emissions. The boost in
powertrain, battery management and charging infrastructure
has created higher demand for shunt resistors, which are used
in BMS for current sensing & monitoring for the charging &
discharging of batteries. The Global EV market size is expected
to grow at a CAGR of 21.6% from FY22 to FY30. Source: Quarterly presentation, Company Analysis
• Switchgears- Indian Switchgear market is expected to grow at a
CAGR of 15% which will be driven by huge Govt capex plans like Exhibit 3: Huge EV Opportunity for SBCL
Smart cities, Make in India, Green Energy Corridor. SBCL’s
products like thermostatic bimetal, silver contacts, thermal
protectors and current sensors will contribute towards
switchgears application.
• Power storage modules- The growth of Power storage modules
is linked to the global transition to renewable energy sources.
65% of India’s energy supply in 2030 is to come from renewable
power sources.

Exhibit 4: Traditional End Application

EV Units Market Size
39223

R 32229
% CAG
21.7 26482
21760
17880
14692
12072
9920
8151

2022 2023 2024 2025 2026 2027 2028 2029 2030

Source: Company Analysis, Investor presentation Source: Company Analysis
 Academic Research Project- Not a Recommendation

Shivalik Bimetals Controls Ltd

Investment Rationale Exhibit 5: EV BMS Shunt Industry Supply Chain

Shivalik’s strong stance in Niche market & strong

Relationship capital

• The Shunts and Bimetal combined Global market is valued at Rs.

3500 cr, in which SBCL occupies a unique position. SBCL’s
components constitute a minute fraction of the overall product
cost, hence it leads to the classic “Make vs Buy” decision. SBCL’s
Shunts are known for its cost effectiveness. For E.g., in a
$10,000 car, the cost of 10 shunts is less than 0.1% of the total
total. So, this cost-effective factor of the shunts make it an
unlikely target for OEMs to squeeze the supply-chain margins.
• Since the Bimetals and Shunts represent a minuscule fraction of
the overall product, the Large OEM & MNC’s won't think of
backward integration and establishing their own manufacturing
facilities. Even their big clients Vishay, Riedon Inc, Robert Shaw
Electronic Controls (Tier 1 suppliers to Tesla, BYD, etc) also have
chosen not to venture into shunt manufacturing at a scale.
• Smaller players in Industry face a huge challenge to replicate
Shivalik’s quality and standards, scale of manufacturing and
market presence.
Exhibit 6: Key Drivers for Repeat business High Level of Customization & Customer centric approach

• 75% of SBCL’s products are customized, which give the

customers the flexibility to address their specific requirements &
preferences.
• Due to this strength, the company has established long-term
relationships with switchgear manufacturers and OEMs, securing
a preferred supplier position in the Industry. Also, the customers
face high switching cost, which becomes an added advantage for
SBCL.
• Faster response time- Shivalik is known for delivering products
with lead times of 4-20 weeks, whereas some of their global
peers take as long as 50-60 weeks.
• SBCL supplies its Shunts to OEMs like Tesla, BYD. So, it takes
around 3-5 years to break into new business with an auto OEM.
Hence, once the OEMs are satisfied with the quality of the
products, they don’t change what has well suited their supply
chains. There are very few players who can match Shivalik’s
quality in Shunts. So, Shivalik enjoys high level of client
Source: Quarterly presentation, Company Analysis
stickiness.
Dominance in Global & Domestic Markets
Exhibit 7: Total Revenue Composition- Geography wise
• Bimetals- SBCL enjoys 16% global market share and expects to
reach 22% in the near future. In the domestic market Shivalik
enjoys 85-90% market share. This segment is a cash cow for FY20 33 14 40 14
SBCL.
• Shunt Resistors- SBCL is one of the few players who can
manufacture low Ohmic shunt resistors and EBW Shunts. It
enjoys a MOAT in terms of low-cost advantage, quality & FY19 35 14 40 11
reliability. As per management there are only 4 players who can
manufacture low ohmic resistors.
• In Shunts, SBCL currently has 12-13% global market share and FY18 32 11 46 12
expects to expand to 17-18%. IsabellenHuette has been the
market leader in automotive shunts industry with a market
share of 50%. SBCL is competing well with the industry leaders FY17 29 11 49 11
especially in the EV Battery management system.
• One of key clients of Shivalik, “Vishay & Schneider Electric India”
have announced huge capex plans themselves. In the domestic
market, SBCLs Shunts are used by renowned enterprises like America Europe India Rest of the World
Tatas and Mahindra.
Source: Company Analysis, Investor presentation
 Academic Research Project- Not a Recommendation

Shivalik Bimetals Controls Ltd

Exhibit 8: Application of Shunts in Automobiles Other Opportunities
• Foray into Electric 2 Wheelers- The company made a significant
announcement in their AGM that their Shunts have received
approval for integration into Ola’s two-wheeler bikes
commercial production.
• 5G rollouts in India- SBCL played a significant role in Europe’s
5G rollout, where Shivalik provided SMD Shunts. So, India’s 5G
rollout will see a big spurt in requirement of SMD Shunts.
Management said they are in talks with Reliance Jio with the
same.
• Forward integration into current sensing modules- The
management has been planning an integration into current
sensing modules, which may increase the value added by 5x.
These modules are particularly used in charging infrastructure,
temperature control for BMS.
• Moving up the supply chain- Till now, SBCL has focused on
supplying Shunts to Tier 2 suppliers like Vishay, TTE, etc. who
then supplied to the OEMs. However, currently Shivalik is
reshaping its position by collaborating directly with Global Tier
1 EV OEMs. This can help SBCL to further improve their margins
Source: Quarterly presentation, Company Analysis
& enter high volume contracts.

Key Risks Exhibit 9: Risk Management Framework

• Entry of new players- Threat of Entry of new players may be
encountered by Shivalik in the upcoming years due to the rising
competitive landscape, growth of end-user industries. However,
Shivalik’s strong customer base, product quality & expertise will
act as a competitive advantage.
• Backward Integration- If a Tier 1 customer who is a customer of
Shivalik decides to backward integrate and manufacture its own
Shunts, then it can be great threat to SBCL. However, as
discussed earlier, these products just cost around 0.1-1% of the
overall product, hence the customers would always prefer to
“Buy” than to “Produce”.
• Higher Customer Concentration- The top 5 customers in shunts
form 40% of Shivalik's business in shunt resistors. For Bimetals
segment, top-5 customers form 30% of the business. Any loss of
a major customer could potentially have a big downside on
SBCL's revenue . Shivalik is trying to address the same by
diversifying the customer base helps mitigate the risk associated
with relying heavily.
• Threat of Substitution- Hall effect sensors or current
transformers can provide current measurement capabilities, Source: Company Analysis, Investor presentation
potentially replacing the need for shunt resistors in certain
applications. Continuous innovation, customization,
Exhibit 10: Marquee Clients of SBCL
collaboration in every phase of manufacturing the product (be it
design/ test phase/ automate phase) by SBCL can address this
threat.
• Raw Material Fluctuations- Nickel, manganese & chromium
steel are the key components in alloys & making bimetals;
whereas copper & manganese are primarily used for making
shunts. Their price volatility can impact production costs, supply
chains, and profitability. Rising geopolitical tension leading to
supply disruptions of nickel and copper could impact the
availability and cost of these essential materials.
• Concerns over the economic slowdown in advanced economies
like the US and EU could have an adverse impact on business.
Ongoing disruptions in the global supply chain can also pose a
threat to the company’s operations.
Source: Company Website, Company Analysis
 Academic Research Project- Not a Recommendation

Shivalik Bimetals Controls Ltd

Exhibit 11: Global GDP Projections (%) Global Economy

More than three years have passed since the global economy faced
0.50% 2.50% 4.50% 6.50% 8.50% its biggest challenge in the last 75 years. Recovery is happening, but
there are differences in how well different parts of the world are
World doing. Tensions between Russia and Ukraine have caused problems
for trade and supply chains, especially for Western countries. High
inflation and ongoing efforts by central banks to control it are
Advanced Economies holding back economic growth. The recent conflict between Israel
and Gaza could make it harder to manage energy costs and keep
supply chains running smoothly.
Emerging Economies
Here's a breakdown of the numbers:
Global Inflation: It has decreased significantly from 11.6% in the
Sub- Saharan Africa
second quarter of 2022 to 5.3%. This means that prices are still
going up, but at a slower pace.
US Advanced Economies: They are expected to experience a slowdown
in economic growth from 2.6% in 2022 to 1.5% in 2023 and 1.4% in
2024. The US is doing better than expected, but growth in the euro
Japan area is weaker than anticipated.
Emerging and Developing Economies: Growth is expected to
decline from 4.1% in 2023 to 4% in 2024, with a downward revision
UK of 0.1 percentage point.
Global Economic Growth: It is expected to slow down from 3.5% in
2022 to 3.0% in 2023 and 2.9% in 2024. This is below the historical
China
average from 2000 to 2019, which was 3.8%.
Global Inflation Forecast: It is predicted to decline steadily from
India 8.7% in 2022 to 6.9% in 2023 and 5.8% in 2024. This decline is due to
tighter monetary policies and lower international commodity prices.

These numbers help paint a clearer picture of the challenges and

2022A 2023P 2024P trends in the global economy. Despite improvements, there are still
concerns, especially regarding inflation and varying growth rates
Source: IMF WEO, Company Analysis
across different regions.
Indian Economy
Exhibit 12: India vs Global GDP Growth (%)
India's economy did well in FY23, even with challenges from the 6.80% 6.90% 7.20% 6.30% 6.30%
pandemic and global conflicts. India became the world's fifth-largest 3.90%
economy, growing at 7.2%, much higher than the global average of
3.5%. The IMF sees India as a positive force in the world economy.

For the next fiscal year, FY24, India is expected to grow around 6- -5.80%
6.6%. The government spending more on infrastructure is likely to 2018 2019 2020 2021 2022 2023P 2024P
boost investments, and growth may also come from expanding
credit, using resources better, and improving trade. India Global

Even though India got a record $84.8 billion in foreign investment Exhibit 13: India GDP Quarterly Growth- Actual vs Projected
(FDI) in FY21-22, it saw a 16% decrease to $71 billion in FY22-23. The
income per person almost doubled in nine years to Rs 172,000, going 16.0%
up by 15.8% from the previous year. People spending more has also
14.0%
helped industries produce more and use resources better.
12.0%
Inflation started going down and went below 5% in April 2023. But
10.0%
challenges like a weaker rupee, high-interest rates, a global economic
15.20%

downturn, and the impact of El Nino on crops might affect India's 8.0%
13.5%

growth.
6.0%
7.70%
7.8%

7.6%

In a nutshell, India's economy is doing well despite challenges, with

6.80%
6.20%
6.3%
6.00%

6.1%

4.0%
5.4%

4.00%

4.60%

4.60%
4.1%

4.4%

positive signs like growth, recognition from the IMF, and more
income for people. Looking ahead, the government's investments 2.0%
and positive trends are expected to continue, but there are still some Q3F Y22 Q4F Y22 Q1F Y23 Q2F Y23 Q3F Y23 Q4F Y23 Q1F Y24 Q2F Y24
challenges.
Actual Projected
Source: IMF WEO, Company Analysis Source: IMF World Bank, RBI, [Link]
 Academic Research Project- Not a Recommendation

Shivalik Bimetals Controls Ltd

Products of the Company

Shunt Resistors Thermostatic Bimetals Electrical Contacts

Product Description Application

Thermostatic A thermostatic bimetal consists of two or more layers of different alloys 1. Temperature indication.
Bimetal Parts/Strips firmly bonded together, having different coefficient of thermal expansion 2. Control of any parameter against
result i.e. high expansion and low expansion. One layer consists of an alloy temperature.
having a high coefficient of expansion while the other layer is one with a 3. Compensation (usually for ambient
lower coefficient of expansion. temperature).
4. Thermo-mechanical applications where
heat is converted into mechanical energy.
SMD/Shunt Shivalik Precision Shunt Resistors are characterized by low temperature co- 1. Energy meters
Resistors efficient, high stability of electrical resistance, low watt loss, and good heat 2. AC/DC Convertors
dissipation. Furthermore, since mounting generally involves contact with 3. Battery Management System (BMS/IBS)
copper, the copper welded to each side facilitates the mounting without the 4. Power Modules
problems of thermo EF and galvanic action. 5. Solar Charge Controllers / String
Monitoring Devices
6. UPS/Inverters
7. Frequency Convertors
8. Low Inductance Applications
9. DC Energy Meters for Telecom
10. Digital Multimeters
11. Electronic Control Units
Reflow Solder/ To reduce the cost of labour and assembly Shivalik offers pre-soldered strip.
Presoldered Strips
The solder strip thickness and location can be varied as per customer's
requirements. The base metals could be any steels, coppers and brasses.
Such strips would eliminate the need for solder preforms or paste, besides
enabling simple automation.
Precsion Stainless Shivalik has in house stamping facility consisting of 10T, 20T, 40T, 50T
Steel stamping process that enable us to produce customize precision parts and
components.

We have our own sophisticated tool room consisting of the following

machines CNC wire EDM, EDM Drill, rotary grinder, milling machine, surface
grinder, drill machine and lathe machine.
Thermostatic Shivalik manufactures and supplies various types of Bimetallic helical and 1. Thermometers (Spiral / Helical)
Bimetal Coil and spiral coils. The configuration of the component varies based on the end 2. Maximum Demand Meters
Springs application. These configurations are precision manufactured to retain a 3. Steam Traps
uniform pitch and provide large movements for small temperature changes 4. Fan Clutches
in a relatively small space. 5. Ventilators
6. Dampers
7. Ambient Temperature Compensators.
8. Heat Actuators
Snap Action Disk The snap acting thermostat metal disc is becoming increasing popular as a
cost-effective protection of small motors and appliances.
A disc of thermostat metal is pretensioned by dishing or doming. With a rise
in temperature, the thermal stresses produced due to the bimetal action
reach a point where they equal the pretensioning stresses. At this point the
disc snaps to the opposite concave. Upon cooling the reverse action takes
place but at a lower temperature.

Source: Company Website, Annual Report

 Academic Research Project- Not a Recommendation

Shivalik Bimetals Controls Ltd

Milestones of the Company

• Incorporated as a private limited company in

June 1984.
• Converted into a public limited company in May
1986.
1984- • Set up first plant in Asia to manufacture
2000 Thermostatic Bimetals in Oct 1986.
• Launch of a new product Cathode Ray Tube
business line for parts.
• Integrated manufacturing process.
• Acquired New Technology & Know how of
• The Company’s in House R&D units stands Electron Beam Welding in 2000.
recognised by the government on 17th
May 2002.
• Entered into a Joint Venture agreement
with Checon Corporation USA in the year
2006 to manufacture silver contacts.
• Entered into a Joint venture with
2002-
ArcelorMittal Stainless & Nickel Alloys and
Dnick Holding Plc. to manufacture 2008
cladding material at SEZ Pithampur,
Indore, MP
• A 100% subsidiary company named
Shivalik Bimetal Engineers Pvt. Ltd. was
incorporated during FY 2007-08 for
providing technical and engineering
services. • Acquired the equipment of Sandvik Heating
Technology, AB, Sweden, for manufacturing
bimetals / trimetals through cold bonding
process in 2011.
2009-
• Launch new product line i.e, Shunt resistor.
2020
• Expanded Product portfolio i.e.,
Thermostatic Bimetal, Trimetal, Coil &
Spring, SMD, Shunt

• Commencement of New Factory.

• Established largest EBW / Bonding / 2021-
Stamping capacity across the globe. 2023
• Achieved Net Worth of INR 230 Crores+.
• Listed on National Stock Exchange of India
Limited

Source: Company Website, Annual Report

 Academic Research Project- Not a Recommendation

Shivalik Bimetals Controls Ltd

Management Analysis
Leadership

Below are the details and experience of the Management and Independent Directors:
Sr no. Name Designation Profiling Comments Political
Nexus
Found?

1 Mr S. S Chairman & 50 Years of experience in the field of Banking, Finance, Mr. Sandhu seems well-suited to lead NO
Sandhu WTD Legal & Corporate Financial Management. Shivalik Bimetals Control Limited. With
Satinderjeet Sandhu is currently associated with 10 over 50 years of experience and a focus
Companies and is director with Innovative Clad Solutions on expanding the company's presence
Private Limited, Shivalik Engineered Products Private nationally and internationally, he brings a
Limited, Morning Side Hotels Private Limited, Vishesh wealth of knowledge to his role as
Credits Private Limited, Ultra Portfolio Management Managing Director. His educational
Private Limited, S S Sandhu Enterprises Private Limited, background and proven track record
Amar Engineering Company Private Limited, Angad suggest he is qualified to navigate the
Estates Private Limited, Spinvision Delhi Veterans Cricket complexities of the bimetal & Shunts
Foundation. manufacturing industry.

2 Mr. N.S MD Mr. Ghumman has 49 years of experience in the field of Mr. Ghumman has shown promise in his NO
Ghumman engineering, R&D, manufacturing operations and product focus on branding for SBCL. His tenure
development. He is a graduate engineer B.E (Hons). He and diverse board roles indicate a well-
was the Chief Engineer in M/s Tradex Gestation SA rounded engagement in the industry.
General of Switzerland. He is responsible to see
production aspects at plant Solan (Himachal Pradesh). He
is the key instrumental for diversifying the company in
many fields and to reach this level.

3 Mr Kabir Head of Mr Kabir Ghumman is a qualified Engineer holding B Mr Kabir, with a robust background NO
Ghumman Manufacturi Tech., Mechanical Engineering from university of Windsor, brings stability and expertise to Shivalik.
ng & Ontario, Canada. He joined SBCL, in May 2011 as Assistant He appears well-suited to handle the
Engineering General Manager- Plant and was made responsible for the manufacturing aspects of the business,
supervision of all technical and mechanical aspects of the adding valuable experience to the
company. Kabir Ghumman is currently associated with 6 company's leadership.
Companies and is director with Sirmaur Craft Food Private
Limited, Shivalik Bimetal Engineers Private Limited,
Shivalik Engineered Products Private Limited, Sirmaur
Hospitality Private Limited, O D Finance And Investment
Private Limited, Solan Developers Private Limited.

4 Mr Kanav Head of Mr. Kanav received a graduate degree in BSc (Hons.) in Mr Anand’s educational background and NO
Anand Sales & Business Management from University of Bradford, UK. board positions suggest a level of
Marketing Kanav Anand has gained 20 years of experience in the expertise.
Industry. His scope of work covers his full involvement in
the marketing aspects of the company.

5 Mr Rajeev CFO Rajeev Ranjan is a Chartered professional, Executive study Rajeev has extensive qualification for the NO
Ranjan in Finance and Financial Management Services. He has a CFO. However, a 10 years of experience
decade long experience working in the Industry. for an important position is a bit
concerning.
 Academic Research Project- Not a Recommendation

Shivalik Bimetals Controls Ltd

Shareholding Pattern
The company has majority of its shareholding with the Promotors of the company to the total of 51.09% as on September 31, 2023. FIIs are
holding 4.18%, DIIs are holding 1.45% and Public holding is at 43.28% respectively. As of Q2FY24, there are no pledged shares by the
promotors of the company. Promotors holding has decreased from 6185% in March 2017 to 51.09% in quarter ended September 2023. If we
look the FIIs holding, it has been decreased from 0% in March 2017 to 4.18% on September 2023. While on the other hand, DII holding has
increased from 0.01% in March 2017 to 1.45% on September 2023.

Yearly Shareholding pattern of company is as under:

Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23 Sep-23
Promoters 61.85% 61.24% 60.77% 60.55% 60.61% 60.61% 60.60% 51.09%
FIIs 0.00% 0.01% 0.00% 0.00% 0.00% 0.21% 0.08% 4.18%
DIIs 0.01% 0.06% 0.06% 0.06% 0.06% 0.13% 0.17% 1.45%
Public 38.14% 38.69% 39.16% 39.39% 39.33% 39.05% 39.14% 43.28%

Exhibit 14: Quarterly Promotor Holding Exhibit 15: Quarterly FII vs DII Holding
5%
62%
60% 4%
58%
3%
56%
54% 2%
52%
50% 1%
48% 0%
46% 0 1 21 1 2 22 2 3 23
-2 -2 21 -2 -2 22 -2 -2 23
c ar n- p- ec ar n- p- ec ar n- p-
20 -2
1 21 21 -2
1
-2
2 22 22 -2
2
-2
3 23 23 De Ju e Ju e Ju e
c- ar n- p- ec ar n- p- ec ar n- p- M S D M S D M S
De M Ju Se D M Ju Se D M Ju Se
FIIs DIIs

Source: [Link] Source: [Link]

Quarterly shareholding pattern of the company

Dec-20 Mar-21 Jun-21 Sep-21 Dec-21 Mar-22 Jun-22 Sep-22 Dec-22 Mar-23 Jun-23 Sep-23
Promoters 60.61% 60.61% 60.61% 60.61% 60.61% 60.61% 60.61% 60.61% 60.60% 60.60% 60.60% 51.09%
FIIs 0.00% 0.00% 0.00% 0.01% 0.07% 0.21% 0.05% 0.06% 0.07% 0.08% 0.46% 4.18%
DIIs 0.06% 0.06% 0.06% 0.02% 0.11% 0.13% 0.16% 0.17% 0.17% 0.17% 0.17% 1.45%
Public 39.33% 39.33% 39.33% 39.36% 39.21% 39.05% 39.18% 39.17% 39.17% 39.14% 38.77% 43.28%

Exhibit 16: Shareholding Pattern (2017-2023) Exhibit 17: Top Shareholders of the company

Shareholder's name Shareholding (%)

O D FINANCE AND INVESTMENT (P) LTD 13.2

ANGAD ESTATES PVT LTD 8.62

38.14% 38.69% 39.16% 39.39% 39.33% 39.05% 39.14%
43.28%
NARINDER SINGH GHUMMAN 7.8
1.45%
TSL HOLDINGS PRIVATE LIMITED 5.85

4.18%
ULTRA PORTFOLIO MANAGEMENT PVT LTD 4.96

61.85% 61.24% 60.77% 60.55% 60.61% 60.61% 60.60% AMAR ENGINEERING COMPANY PVT LTD 3.68
51.09%

TEJINDERJEET KAUR GHUMMAN 1.6

SATINDER JEET SINGH SANDHU 1.5

Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23 Sep-23
B S SANDHU AND ASSOCIATES PRIVATE LTD 1.49
Promoters FIIs DIIs Public
MAHENDRABHAI CHANDULAL DHARU HUF 1.43
Source: [Link], equitymaster
 Academic Research Project- Not a Recommendation

Shivalik Bimetals Controls Ltd

Commentary
Management Remuneration

Basis our research we found that company’s remuneration policy for its executive and non- executive directors is justifiable. During FY23 the
company incurred managerial remuneration of INR 6.43 Crores as against INR 6.42 crores in FY22. There was a 30.49% and 25.91% hike in CFO
Mr. Rajeev Ranjan and CS Ms. Aarti Sahni’s remuneration.

Name Designation Ratio of Remuneration Remunerati Growth in Sales Net Profit

remuneration to FY23 on FY22remuneratio Growth YoY Growth YoY
median n (%) (%)
remuneration of
employees
Mr S.S Sandhu Chairman & WTD 97x 3.21 3.21 0.00% 29.70% 40.38%
Mr N.S Ghumman M.D 97x 3.21 3.22 -0.31% 29.70% 40.38%
Head of Manufacturing &
Mr. Kabir Ghumman Engineering 46x 1.53 1.24 23.39% 29.70% 40.38%
Mr. Keshav Anand Head of Sales & Marketing 46x 1.53 1.25 22.40% 29.70% 40.38%
Mr. Mukesh Verma Head of Commercial & Admin 36x 1.19 29.70% 40.38%
Mr. Rajeev Ranjan Chief Financial Officer 35x 1.18 30.59% 29.70% 40.38%
Total 11.85 8.92 76.07% 29.70% 40.38%

Median ratio of Managing Director’s remuneration with median employee salary is 97x, which is in par with the industry standards. The
remuneration of M.D as a percentage of Profit Before Tax (PBT) for FY23 is 3.27%. There is an increase in median remuneration of employees in
FY23, median stood at 12.33. The number of permanent employees on the rolls of the company are 478.
Non- Executive Directors Remuneration

The details of the sitting fees of the independent directors is as under:

Name Designation Sitting Fees FY23 Sitting Fees FY22 Growth in fees

Mr. Nirmaljeet Singh Gill Independent Director 77500 40000 93.75%

Lt. Gen. Pradeep Khanna (Retd.) Independent Director 67500 42500 58.82%

Mrs. Anu Ahluwalia Independent Director 72500 50000 45.00%

Mrs. Harpreet Kaur Independent Director 55000 40000 37.50%

Mr. Gurmeet Singh Gill Independent Director 45000 30000 50.00%

Mr. Swarnjit Singh Independent Director 60000 22500 166.67%

Board Efficiency

The efficiency of the Board can be analyzed by their contribution in various important meetings held in FY23. The details are as under:

No. of Board Meetings

Name of Directors Category of Directorship Held Attended Attendance at
Last AGM

Mr S.S Sandhu Chairman & WTD 2 2 Yes

Mr N.S Ghumman M.D 2 1 Yes
Mr. Nirmaljeet Sing Gill Member 2 - Yes
Mr. Pradeep Khanna Member 2 - Yes
Mr. Rajeev Ranjan Member 2 1 Yes
Mr. Kanav Anand Member 2 2 Yes
Mr. Kabir Ghumman Member 2 1 Yes

Source: Annual Report FY23, FY22

 Academic Research Project- Not a Recommendation

Shivalik Bimetals Controls Ltd

Profit & Loss Snapshot
Profit & Loss (Rs. Mn) FY22 FY23 FY24E FY25E FY26E
Net Revenue 3240 4704 5700 7340 8950
Change (QoQ %) 45.19% 21.17% 28.77% 21.93%
Total Expenditure 2505 3615 4437 5731 6875
EBITDA 735 1089 1263 1609 2075
Change (QoQ %) 48.16% 15.98% 27.40% 28.96%
EBITDA Margin (%) 22.69% 23.15% 22.16% 21.92% 23.18%
Depreciation 64 105 162 169 171
EBIT 671 984 1101 1440 1904
Other Income 54 99 114 147 179
Interest 28 70 85 110 134
PBT (Before JV Share) 697 1013 1130 1477 1949
Share of JV/Associates 35 10 15 15 15
PBT 732 1023 1145 1492 1964
Provision for Tax 182 232 286 395 491
PAT 550 791 859 1097 1473
Net Profit Margins (%) 16.98% 16.82% 15.07% 14.95% 16.46%
EPS 14.35 13.73 14.9 20.59 25.57
Balance Sheet Snapshot
Balance Sheet (Rs Mn) FY22 FY23 FY24E FY25E FY26E
Equity Capital 77 115 115 115 115
Reserves 1839 2540 3329 4428 5815
Net Worth 1916 2655 3444 4543 5930
Minority Interest - - - - -
Non-Current Liabilities 208 290 335 296 419
Current Liabilities 954 953 927 1126 1346
Total Liabilities 3078 3898 4706 5965 7695
Non-Current Assets 1081 1361 1312 1263 1211
Fixed Assets 846 1203 1134 1045 954
Goodwill - 20 20 20 20
Non-Current Investments 185 98 114 142 169
Deferred Tax Assets - - - - -
Other Financial Assets - 4 - - -
Other Non-Current Assets 50 36 43 56 68
Current Assets 1997 2536 3394 4802 6484
Current Investments - - - - -
Inventories 1149 1320 1577 2011 2452
Trade Recievables 593 932 1093 1307 1471
Cash & Bank Balances 9 2 2 2 2
Short Term Loans and Advances - - - - -
Other Financial Assets 0 1 - - -
Other current assets tax (net) 0 1 1 1 1
Other current assets 137 104 125 162 197
Total Assets 3078 3897 4706 6065 7695
Source: [Link], Consensus Estimate
 Academic Research Project- Not a Recommendation

Shivalik Bimetals Controls Ltd

Commentary

Revenue Exhibit 18: Shivalik's Revenue

Revenue from operations. In Half Year '24, we achieved a revenue of 450 420 0.7
INR225.47 crores, reflecting 11.31% year-on-year growth. In the
second quarter of fiscal year 2024, revenue from operations increased 400 0.6
by 7.18% to reach INR112.40 crores.
350 324 0.5
The management gave a guidance regarding revenue target post its 300
capex expansion to Rs. 1600 cr, which is appx 5 times of current 0.4
revenue. This potential revenue will be achieved in time span of 5-6 250
years. 193 187 204 0.3
200
The company might have another quarter or two where it could 158
0.2
probably see some constraints but when it comes to next financial 150 119
year, the confidence is very high from the customers as well as from 95 99 0.1
100 79 78 81
company's side. Like for the Smart meters, company is already seeing
tenders rolling out and suppliers building up their capacities. 0
50
The sales from automotive is 40% of the total sales and out which half 0 -0.1
is from BMS. Smart meters accounts for another 40% of the total Sales 2 13 14 15 16 17 18 19 20 21 22 23
and balance is from Energy and Storage motors. -1 - - - - - - - - - - -
ar ar ar ar ar ar ar ar ar ar ar ar
M M M M M M M M M M M M
When it comes to the shunt for the metering business, the company is
Revenue Shivali k's revenue Growth (%)
looking at trying to double it for next year for the smart metering
application.
Source: Company Analysis

120.00 1.2
Exhibit 19: EBITDA 105.00 EBITDA Margins
1
100.00
0.8
EBITDA margin for Half Year '24 reached INR56.81 crores with a 14.60% year-
80.00 73.00 0.6
on-year growth. EBITDA grew by 9.82% year-on-year. EBITDA as a percentage
0.4 of revenue improved to 25.20% in Half Year ‘24.
60.00
0.2

40.00
36.00 36.00
0 In future, when the company has a 5 times Revenue, this wood reflect in
26.00
21.00
some addition to the EBITDA Margins as some level of Operating leverage
19.00 -0.2
20.00 11.00
15.00 14.00 would kick in. The management guided there would be around 2%- 3% in
6.00 7.00 -0.4 addition to the EBITDA Margin, which would be around 28% - 29%.
0.00 -0.6

r-1
2
r-1
3
r-1
4
r-1
5
r-1
6
r-1
7
r-1
8
r-1
9
r-2
0
r-2
1
r-2
2
r-2
3 If we look at the Individual product's EBITDA Margins, they all are in similar
a a a a a a a a a a a a
M M M M M M M M M M M M range. Thermostatic Bimetal and the shunt register, the EBITDA margin is in
the range of 20% to 25%. And similarly, for electrical contact, it is in the range
EBITDA EBITDA Growth Y- o- Y %
of 9% to 11%.
Source: Company Analysis

Inventory Exhibit 20: Revenue vs Inventory Growth

If we look at Revenue growth and Inventory growth, we can say both are 80%
positively correlated, however even a small change in revenue growth leads
to substantial change in the Inventory Growth. Inventory as a % of Revenue 60%
stood for FY23 stood at 29%, which is above the company's median of 27%.
40%
During the Pandemic, the entire supply was in constraint, hence a lot of
overstocking took place, people were trying to order more in advance and 20%
trying to keep more and more stock because a small component, but a key
component like what SBCL produces can bring to a halt in production of an 0%
entire automobile.
-20%
There is also a slight imbalance in the Inventory, due to semiconductor still
being a shortage situation. No matter, a customer would have all the other
-40%
components, but if they don't have a semiconductor, the whole line is on a
3 4 5 6 7 8 9 0 1 2 3
standstill. So, management believes lot of inventory correction is happening. -1 -1 -1 -1 -1 -1 -1 -2 -2 -2 -2
ar ar ar ar ar ar ar ar ar ar ar
M M M M M M M M M M M
However, in the medium to long term, company feels that the megatrends are
very strong to kind of push the demand for these components again. Growth in Revenue Growth in Inventory

Source: Company Analysis

 Academic Research Project- Not a Recommendation

Shivalik Bimetals Controls Ltd

Commentary

Exhibit 21: Revenue growth vs Debtors Growth Trade Receivables

70% Following the impact of Covid, the company has experienced a

significant Increased in Trade Receivables, indicating that there have
60% been delays in payments from debtors. The company’s average
50% receivables days stood at 69 days in FY23 as compared to the
company’s median debtor days of 30. The increase in debtor days is
40% due to strong demand from company's international presence and
focus on adding more new customers. The increase in debtors can be
30%
probably due to the slowdown and inventory pileup in the
20% automotive sector, changes in the credit policy of the company.
10% The company’s receivable ageing analysis reflects that 100% of the
0% outstanding debtors are less than 6 months. The proportion of
receivables as a percentage of total assets has increased, increasing
-10% from 19.5% in FY22 to 22% in FY23. The Cash Conversion Cycle has
gone down to 224 in FY23 due to decrease in Inventory days.
-20%
3 4 5 6 7 8 9 0 1 2 3
-1 -1 -1 -1 -1 -1 -1 -2 -2 -2 -2 The decline in Days Payable from 95 to 61 indicates that the company
ar ar ar ar ar ar ar ar ar ar ar
M M M M M M M M M M M is taking less time to pay its suppliers. While this may suggest efficient
management of payables, it could also be a strategic decision or
Growth in Revenue Growth in Recei evables indicative of potential challenges in supplier relationships.

Source: Company Analysis

Interest Coverage Cost Exhibit 22: Interest Coverage

25.0 22.3
6%
In the fiscal year 2023, the company's interest expense rose
significantly by 133% to Rs. 7 crore compared to the previous year's 20.0
5%
expense of Rs. 3 crore. Due to this increase, the current interest
15.0 4%
coverage ratio stands at 13.9x, which is well above the company's 15.0 13.9
median ratio of 4.8x. The rise in interest costs over the period is 3%
attributed to the company's debt raise for the capital expenditures. 10.0 7.0 7.8
2%
4.7 5.0
An Interest coverage ratio of 13.9 means that the company can 5.0 3.0
4.0
2.5 1%
sufficiently cover the interest expense for 13 years from the EBIT. 1.0 1.3
This is a healthy sign of SBCL. 0.0 0%
2 3 4 5 6 7 8 9 0 1 2 3
-1 -1 -1 -1 -1 -1 -1 -1 -2 -2 -2 -2
Interest expense is approx. 2% of the total sales and is constant for ar ar ar ar ar ar ar ar ar ar ar ar
M M M M M M M M M M M M
the past 10 years. So SBCL can effectively and efficiently manage its
borrowings. Interest Coverage Ratio Intrest ex pense % Sales
Source: Company Analysis

Exhibit 23: CFO/EBITDA Cash Flows

250% The company’s Cash Flow from Operations (CFO) for the FY23 is Rs 61
cr, which has increased by 110% from FY21. Shivalik's CFO/EBITDA
200% ratio stands at 58.1%, notably lower when compared with the
company median CFO/EBITDA ratio of 64.9%. This represents a
increase from the previous year and exhibits considerable volatility
150%
over the years. The below median CFO/EBITDA ratio indicates that
the company faces challenges in converting its earnings into cash
100%
flows.

50% A favourable CFO/EBITDA ratio for B2B companies is around 60%,

whereas B2C companies find a 70% ratio favourable. So Shivalik being
0%
a B2B supplier has an efficient CFO/EBITDA ratio. Additionally, a
2 3 4 5 6 7 8 9 0 1 2 3 higher CFO/EBITDA ratio signifies a robust Return on Invested Capital
-1 -1 -1 -1 -1 -1 -1 -1 -2 -2 -2 -2
ar ar ar ar ar ar ar ar ar ar ar ar (ROIC), which is true in the case of Shivalik.
-50% M M M M M M M M M M M M

Source: Company Analysis

 Academic Research Project- Not a Recommendation

Shivalik Bimetals Controls Ltd

DUPONT ANALYSIS

RETURN ON EQUITY (ROE)

Mar-20 Mar-21 Mar-22 Mar-23
NET PROFIT ₹ 12.76 ₹ 24.15 ₹ 51.97 ₹ 73.03
AVERAGE SHAREHOLDERS EQUITY ₹ 110.43 ₹ 126.78 ₹ 162.71 ₹ 221.10
RETURN ON EQUITY 11.55% 19.05% 31.94% 33.03%

ROE - DUPONT EQUATION

Mar-20 Mar-21 Mar-22 Mar-23
NET PROFIT ₹ 12.76 ₹ 24.15 ₹ 51.97 ₹ 73.03
REVENUE ₹ 187.22 ₹ 203.72 ₹ 323.99 ₹ 420.23
NET PROFIT MARGIN (A) 6.82% 11.85% 16.04% 17.38%

REVENUE ₹ 187.22 ₹ 203.72 ₹ 323.99 ₹ 420.23

AVERAGE TOTAL ASSETS ₹ 168.83 ₹ 189.87 ₹ 259.86 ₹ 331.63
ASSET TURNOVER RATIO (B) 1.11 1.07 1.25 1.27

AVERAGE TOTAL ASSETS ₹ 168.83 ₹ 189.87 ₹ 259.86 ₹ 331.63

AVERAGE SHAREHOLDERS EQUITY ₹ 110.43 ₹ 126.78 ₹ 162.71 ₹ 221.10
EQUITY MULTIPLIER (C) 1.53 1.50 1.60 1.50

RETURN ON EQUITY (A*B*C) 11.55% 19.05% 31.94% 33.03%

RETURN ON ASSETS (ROA)

Mar-20 Mar-21 Mar-22 Mar-23
NET PROFIT ₹ 12.76 ₹ 24.15 ₹ 51.97 ₹ 73.03
AVERAGE TOTAL ASSETS ₹ 168.83 ₹ 189.87 ₹ 259.86 ₹ 331.63
RETURN ON EQUITY 7.56% 12.72% 20.00% 22.02%

ROC - DUPONT EQUATION

Mar-20 Mar-21 Mar-22 Mar-23
NET PROFIT ₹ 12.76 ₹ 24.15 ₹ 51.97 ₹ 73.03
REVENUE ₹ 187.22 ₹ 203.72 ₹ 323.99 ₹ 420.23
NET PROFIT MARGIN (A) 6.82% 11.85% 16.04% 17.38%

REVENUE ₹ 187.22 ₹ 203.72 ₹ 323.99 ₹ 420.23

AVERAGE TOTAL ASSETS ₹ 168.83 ₹ 189.87 ₹ 259.86 ₹ 331.63
ASSET TURNOVER RATIO (B) 1.11 1.07 1.25 1.27

RETURN ON EQUITY (A*B*C) 7.56% 12.72% 20.00% 22.02%

RETURN ON CAPITAL EMPLOYED (ROCE)

Mar-20 Mar-21 Mar-22 Mar-23
NOPAT ₹ 11.44 ₹ 22.36 ₹ 49.97 ₹ 72.06
AVERAGE CAPITAL EMPLOYED ₹ 139.89 ₹ 140.71 ₹ 195.24 ₹ 256.07
RETURN ON CAPITAL EMPLOYED 8.17% 15.89% 25.59% 28.14%

ROCE - DUPONT EQUATION

Mar-20 Mar-21 Mar-22 Mar-23
NOPAT ₹ 11.44 ₹ 22.36 ₹ 49.97 ₹ 72.06
REVENUE ₹ 187.22 ₹ 203.72 ₹ 323.99 ₹ 420.23
NOPAT MARGIN (A) 6.11% 10.98% 15.42% 17.15%

REVENUE ₹ 187.22 ₹ 203.72 ₹ 323.99 ₹ 420.23

AVERAGE CAPITAL EMPLOYED ₹ 139.89 ₹ 140.71 ₹ 195.24 ₹ 256.07
CAPITAL TURNOVER RATIO (B) 1.34 1.45 1.66 1.64

RETURN ON EQUITY (A*B*C) 8.17% 15.89% 25.59% 28.14%

 Academic Research Project- Not a Recommendation

Shivalik Bimetals Controls Ltd

Unlocking Financial Potential : (1/1)
Exhibit 24: Revenue Growth at 24% CAGR Exhibit 25: PAT Margins keep getting stronger

150 127 20%

801 118
15%
646 100 85
73
521 52 10%
420 50
324 24 5%
204
0 0%
FY21 FY22 FY23 FY24E FY25E FY26E

FY21 FY22 FY23 FY24E FY25E FY26E PAT Pat Margin

Exhibit 26: EBITDA Growth at 26% CAGR Exhibit 27: Robust ROE & ROCE

250 30.0%
34%
200 33% 33%
25.0% 32%
200
161 30%
20.0% 29%
130 28%
150
105 15.0% 26%
25% 25%
100 73
10.0%
50 36 20%
5.0%
17%
0 0.0%
FY21 FY22 FY23 FY24E FY25E FY26E FY21 FY22 FY23 FY24E FY25E FY26E

EBI TDA EBI TDA Marign ROE ROCE

Exhibit 28: Assets to almost double by FY26 Exhibit 29: FCFF to cross 1000 Mn Mark by FY26

5 1239
3
3 3 4 842
3 753

165 176

-265
FY21 FY22 FY23 FY24E FY25E FY26E FY21 FY22 FY23 FY24E FY25E FY26E

Exhibit 30: Shunts Volume & Realization per Kg Exhibit 31: Bimetal Volume & Realization per Kg

12000 10472 2500 12000 11197 2000

10179
10000 2000 10000 9366
7944 1500
7314 7413
8000 6465 8000 6970 7291
6844 6937
1500
6000 6000 1000
1000
4000 4000
500 500
2000 2000
0 0
0 0
FY18 FY19 FY20 FY21 FY22 FY23 FY18 FY19 FY20 FY21 FY22 FY23

Shunt Vol Revenue per Kg Bimetal Volume Revenue per Kg

Source: Company Analysis

 Academic Research Project- Not a Recommendation

Shivalik Bimetals Controls Ltd

DUPONT ANALYSIS
SHIVALIK BIMETAL CONTROLS LTD
Profitability Ratios Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23
Sales Growth 18.0% 3.8% 20.0% 33.0% 22.5% -3.2% 8.8% 59.0% 29.7%
Expenses Growth 17.6% -3.0% 29.4% 40.5% 23.9% -19.4% 29.2% 42.8% 29.0%
Sustainable Growth Rate 6.3% 8.1% 6.3% 10.7% 16.1% 19.7% 10.1% 15.8% 25.7% 25.9%
Gross Profit Growth 17.9% 14.1% 25.7% 27.1% 24.0% 5.5% 1.6% 67.3% 29.1%
EBITDA Growth 39.5% -11.9% 40.4% 35.1% 38.8% -41.6% 74.0% 103.3% 42.6%
EBIT Growth 40.8% -19.3% 46.9% 45.6% 46.2% -52.0% 104.8% 121.9% 43.5%
PBT Growth 104.1% -22.9% 114.5% 56.8% 48.7% -49.3% 98.2% 113.7% 39.9%
Net Profit Growth 40.3% -16.6% 109.0% 85.7% 44.3% -44.7% 89.3% 115.2% 40.5%
Dividend Growth 0.0% 0.0% 0.0% 139.6% 0.0% -50.0% 100.0% 67.0% 79.9%
Dividend Payout 0.0% 0.0% 0.0% 11.1% 14.4% 10.0% 9.0% 9.5% 7.4% 9.5%
Gross Margin 39.4% 39.4% 43.3% 45.3% 43.3% 43.8% 47.8% 44.6% 46.9% 46.7%
Operating Margin 13.6% 16.1% 13.7% 16.0% 16.2% 18.4% 11.1% 17.7% 22.7% 24.9%
PBT Margin 5.1% 8.9% 6.6% 11.7% 13.8% 16.8% 8.8% 16.0% 21.5% 23.2%
Net Margin 4.4% 5.2% 4.2% 7.3% 10.1% 11.9% 6.8% 11.9% 16.0% 17.4%

Efficiency Ratios Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23
Debtor Days 98.33 92.30 88.91 81.27 77.67 65.27 60.34 76.72 66.78 69.47
Debtor Turnover 3.71 3.95 4.11 4.49 4.70 5.59 6.05 4.76 5.47 5.25
Inventory Days 84.17 110.40 86.33 80.19 93.87 130.74 98.49 125.67 129.42 105.86
Inventory Turnover 4.34 3.31 4.23 4.55 3.89 2.79 3.71 2.90 2.82 3.45
Net Fixed Asset Turnover 4.02 2.74 3.02 2.75 3.49 4.27 4.12 4.46 4.10 4.12
Total Asset Turnover 0.71 0.75 0.78 1.01 1.06 1.10 1.16 0.93 1.07 1.16
Sales/Capital Employed 0.85 0.91 0.92 1.19 1.30 1.29 1.34 1.22 1.32 1.37

Leverage Ratios Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23
Debt/Equity 68.8% 72.4% 65.4% 40.2% 42.1% 42.4% 21.5% 21.2% 31.0% 20.6%
Debt/Assets 34.1% 34.7% 33.6% 24.3% 24.2% 25.4% 15.4% 13.4% 19.2% 14.6%
Debt/EBITDA 351.6% 287.0% 314.2% 150.9% 140.0% 125.8% 119.6% 80.9% 78.9% 50.3%
Debt/Capital 40.8% 42.0% 39.5% 28.7% 29.6% 29.8% 17.7% 17.5% 23.6% 17.1%
CFO/Debt 24.8% 6.2% 36.4% 41.0% 15.7% 8.4% 166.0% 100.9% -6.0% 116.3%
Debt Burden 21.3% -35.6% 31.9% 29.9% -4.3% -5.3% 107.8% 50.1% -48.5% 64.9%
Interest Coverage (Times) 2.30 3.63 2.67 6.49 7.60 10.08 6.60 21.03 26.28 15.70
Operating Leverage 2.27 -5.06 2.34 1.38 2.05 16.29 11.89 2.07 1.47
Financial Leverage 2.02 2.09 1.95 1.65 1.74 1.67 1.40 1.58 1.61 1.42

DuPont Ratio Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23
DuPont ROA 3.1% 3.9% 3.3% 7.3% 10.8% 13.1% 7.9% 11.1% 17.2% 20.2%
Net Profit Margin 4.4% 5.2% 4.2% 7.3% 10.1% 11.9% 6.8% 11.9% 16.0% 17.4%
Sales/Total Asset 0.71 0.75 0.78 1.01 1.06 1.10 1.16 0.93 1.07 1.16
Return on Equity 6.3% 8.1% 6.3% 12.1% 18.8% 21.9% 11.1% 17.5% 27.8% 28.6%

Capital Allocation Ratios Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23
Return on Capital Employed 7.7% 11.1% 9.7% 16.5% 20.8% 24.0% 13.8% 20.5% 29.6% 33.9%
EBIT Margins 10.7% 12.8% 9.9% 12.2% 13.3% 15.9% 7.9% 14.8% 20.7% 22.9%
Sales/Capital Employed 0.85 0.91 0.92 1.19 1.30 1.29 1.34 1.22 1.32 1.37
NOPAT 7.37 7.14 6.23 8.92 15.38 21.82 11.44 22.36 49.97 72.06
Return on Invested Capital 3.7% 4.7% 4.1% 8.7% 13.2% 15.4% 9.1% 15.9% 22.3% 25.1%

Valuation Ratios Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23
Enterprise Value (EV) 54.1 99.7 73.7 149.5 468.3 575.4 106.6 340.5 2018.3 2993.1
EV/EBITDA 4.92 6.49 5.45 7.88 18.26 16.17 5.13 9.42 27.47 28.57
Price/Earnings 4.50 11.33 9.56 14.16 27.06 23.01 6.44 13.55 37.95 40.50
Price/Sales 0.20 0.59 0.40 1.03 2.74 2.75 0.44 1.61 6.09 7.04
Price/CFO 1.65 20.43 2.55 10.40 76.73 141.24 1.99 11.09 -566.73 48.31
Price/Book Value 0.28 0.92 0.61 1.71 5.08 5.03 0.71 2.37 10.54 11.60

Source: Company Analysis

 Academic Research Project- Not a Recommendation

Shivalik Bimetals Controls Ltd

ROIIC Profiling
Rs Cr Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23

Net Income 3.52 4.94 4.12 8.61 15.99 23.08 12.76 24.15 51.97 73.03
Capital Employed 94.49 104.57 99.29 98.79 120.81 149.82 139.75 151.54 233.30 290.60
Cumulative Net Income 3.52 8.46 12.58 21.19 37.18 60.26 73.02 97.17 149.14 222.17
Incremental Capital 10.08 -5.28 -0.50 22.02 29.01 -10.07 11.79 81.76 57.30

ROIIC 14.09% 15.53% -898.00% 33.51% 24.44% 102.48% 96.61% 34.03% 36.75%
ROCE 11.08% 9.68% 16.50% 20.77% 24.00% 13.85% 20.47% 29.59% 33.88%

Reinvestment Rate 119.15% -41.97% -2.36% 59.23% 48.14% -13.79% 12.13% 54.82% 25.79%
Intrinsic Compounding Rate 16.78% -6.52% 21.19% 19.85% 11.77% -14.13% 11.72% 18.65% 9.48%

ROIIC Profiling (10 Years) • Over the 10-year period , the company achieved a ROIIC of 35.44%, which
suggests a High efficiency in generating returns on capital reinvested.
Cumulative Net Income 222.17 SBCIL has a reinvestment rate of 88% which reflects that company’s
Incremental Capital Deployed 196.11 capital is being efficiently reinvested in the company.
• The Intrinsic compounding rate of 31.29% suggest that company is
Reinvestment Rate 88.27% growing its intrinsic value at a significant pace.
• A CAGR of 68% suggests that the stock has significantly outperformed the
market during this period. Investors have seen substantial returns on their
ROIIC 35.44% investment.
• The High Reinvestment rate may indicate strong growth opportunities,
Intrinsic Compounding Rate 31.29% efficient capital allocation, or identification of projects with good returns.
The Return on Invested Capital (ROIIC) is notably higher than the Return
on Capital Employed (ROCE), indicating that the company is efficiently
Stock Price (10 Year CAGR) 68.70% using both equity and debt to generate returns for its investors.
Stock Price (5 Year CAGR) 46.87% • SBCL appears to be a company with strong growth potential, efficient
capital utilization, and a commitment to reinvesting in its operations for
future expansion.

Forensic Analysis
Key Findings:

Chances of aggressive revenue recognition - Operating profit of company is not getting converted to cash and receivables rising faster
than sales.

Company has maintained it ROCE despite making significant capex

Retail has been buying the stock which is usually a sign of exuberance

Net Profit Margin is responsible for ROE increase over last 10 years

Company is trading at a premium to 3-year historic valuations

Company does not have significant contingent liabilities.

Share price has increased over last 10 years due to earnings

Company is depreciating a greater percentage of assets. This is contributing to a reduction in Net Profit

Source: Company Analysis, Tijori

 Academic Research Project- Not a Recommendation

Shivalik Bimetals Controls Ltd

Analyst Coverage Estimate

# Date Research House Price at Reco Type Target

1 01-Sep-22 HDFC Securities 599 Buy 715

Source: Trendlyne

Disclaimer: This is an academic project and is not meant for commercial usage.

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official confirmation of any transaction. The information contained herein is obtained from publicly available data or other sources believed
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Author is not SEBI registered investment analyst. This document is prepared as a part of academic project.

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