Shivalik Bimetal Controls Ltd

- The management noted a current market slowdown mainly due to inventory destocking and macro factors, but the order book remains healthy without any loss of clients. - Customers have shown positive outlook with some confirmed orders and are asking Shivalik to prepare for future demand, indicating confidence beyond a quarter or two. - There is ongoing addition of new developments and customer engagements, especially in domestic and export markets. - The management mentioned advanced discussions for volume contracts with industry leaders aimed at achieving their medium to long-term revenue targets. - The shunt business order levels are temporarily lower due to macroeconomic challenges but expected to recover in the next financial year. - Smart meter-related tenders and orders are picking up, contributing to future growth visibility. - Export business is anticipated to drive bigger growth over the next 2-3 years while the domestic market will grow slowly.

- The management indicated a clear vision to reduce long-term borrowings and is working towards zero long-term debt. - They aim to maintain some working capital debt due to the industry being working capital-intensive. - There was a significant reduction in both long-term and short-term borrowings in the recent quarter. - No specific mention of new fundraising through debt or equity was made during the call. - Future capex related to new MOUs or expansions may happen but exact details or amounts are not disclosed currently. - Overall, the company appears focused on managing leverage conservatively without plans for immediate new fundraising via debt or equity.

- The company is in advanced discussions for a potential joint venture with Metalor, a Swiss leader in silver contacts, which aligns with their growth strategy in the silver contact segment. - Future capex is expected to be relatively small since many facilities already exist; any additional expenditure will be aimed at creating a world-class setup supporting volume growth. - They anticipate some capex related to expanding capacity, especially given customers’ investments in adding capacities in e-mobility, energy storage, and renewable energy applications. - No detailed quantification of new capex is available currently; further details will emerge as MOUs are signed and projects progress. - The focus is on leveraging existing facilities while selectively adding capacity to meet growing demand domestically and internationally. - Overall, capex plans support scaling revenue potentially up to INR 1,500-1,600 crores over the next 3-5 years.

- Confident to maintain current growth levels despite short-term slowdown in shunt business. - Bimetal capacity expansion driven by strong demand and new opportunities; expected to sustain good growth. - Domestic market showing significant growth (around 20-25%), especially in bimetal sector; domestic contributing ~40% currently. - Export business expected to lead long-term growth, with large future opportunities primarily from exports. - Smart meter business currently ~10% of total revenue; expected to potentially double in next 1-2 years but will remain a smaller percentage overall initially. - Market normalization and inventory destocking expected in next few quarters; growth range post Q4 FY24 projected between 10% and 40% depending on macroeconomic factors. - Customer engagements increasing, with anticipation of volume contracts in coming periods. - Long-term revenue targets around INR 1,500-1,600 crores supported by capacity expansions and new contracts.

- Management is confident of maintaining current growth levels despite shunt business slowdown, supported by strong bimetal growth. - Bimetal capacity was increased anticipating strong demand from existing and new customers, expected to drive good growth and overall earnings improvement. - Post Q4 FY24, management projects a wide growth range of 10%-40%, reflecting uncertainty but underscoring potential for strong upside if export markets normalize. - Domestic smart meter business is growing fast and expected to at least double in coming years, contributing positively to earnings. - Market headwinds, including macroeconomic and inventory destocking, may cause short-term pressure, but these are seen as temporary. - Operating leverage and cost control, along with forex gains, are expected to support margin improvement and profitability. - Long-term outlook remains positive with revenue targets linked to capacity expansions and growing demand from EV, renewable energy, and infrastructure segments. - Management does not expect losing clients, with new developments underway, aiding future profit growth.