BULK Deal update:-
▪️Big SME Investor SELVAMURTHY
AKILANDESWARI✅ Bought 1,16,800 shares of Thaai casting ltd at avg Rs.180😮🔥
📌📌 ➡️ ➡️
▪️Incorporated in June 2010, Thaai Casting Limited✅ is an automotive ancillary company specializing in High-Pressure Die Casting, as well as the precision Machining of both Ferrous and Non-Ferrous materials and Induction heating and quenching. The company has three business verticals:-
1)High Pressure Die 90% Rev✅).
2)Machining of Ferrous and Non-Ferrous.💫
3)Induction Heating and Quenching.💫
▪️The company offers a wide range of automotive components, such as engine mounting support brackets, transmission mounts, fork shift and housing, steering wheel armatures, electrical connectors, YFG base frames (both right-hand and left-hand drive side), housing, top cover, and more.💫
▪️They use Aluminium ingot in die #ElectricVehicles require More Aluminium components🚀)
▪️They are also diversifying into making components for green tech like EV components and #Wind Awnings for Turbines. As people move towards more and more Greener and Renewable sources✅, Thaai Casting will pivot and will be ready to supply those industries in more and more quantum.
📌Big Wind Generator manufacturer Flender-German✅ came to India and visited Thaai casting plants😮. In interview, the management said they are supplier for WIND TURBINE GREEN POWER GENERATION industry also.🚀
▪️Manufacturing unit :-Tiruvallur, Tamil Nadu, India.💫
▪️Company has the flexibility to change as per demand. And there is more and more diversification to remove any sectoral downturn impact.✅
📌Thaai Induction and Nitriding Pvt Ltd, a Wholly Owned Subsidiary of Thaai General Engineering) through its tier 1, Flender Drives Pvt Ltd.🔥🔥
▪️Thaai Casting is an IATF 16949: 2016 certified company✅.
📌Awards and Achievements:-🔥🔥
➢2021:-Company received MSIL –GREEN Certification (Maruti Suzuki India Ltd✅) for acknowledge the efforts and achievements of environment-friendly practices and committing to sustainable development.
➢2022:-Company received awards from Hanon and RSB for Best Quality and Best Vendor.🔥
➢2023:-Approved vendor of GE renewable through Flender Drives.🚀
➢2014:-Company received award from Hyundai Motors for fulfilling the Quality Assurance Compliance.
➢2019:-Company received award from Tokai Rubber Auto Parts for Best Quality, Cost and Delivery Company.
➢2019:-received IATF 16949:2016 certificate for recognized as world-class automotive supplier.🔥🔥
📌Capacity:-
➢Capacity Installed For High Pressure Die Casting: 2500 tonnes.
➢capacity utilization: 65-70%
➢Recently Thaai casting increased their products 1kg to 4.5kg component and after current machinery is installed they will make upto 8 kg components soon. Bigger and heavier component capability will be added.✅
📌📌
▪️IPO price: Rs.77
▪️IPO size: 47.2Cr (excluding anchor size is:33.85Cr)
▪️CMP:Rs.195
▪️Market cap: 450Cr
▪️P/E:30✅
▪️EPS:6.38
▪️ROE: 63.59%
▪️ROCE: 35.68%
▪️Employees: 132
▪️Debt/Equity:1.85
▪️Assets:146.38 Cr
▪️Total Borrowing:78.3 Cr (Reserves and Surplus:6.2Cr)
📌FINANCIALS:
▪️FY24-7M Rev: 48.48 Cr🔥
▪️FY24-7M PAT: 8.6 Cr🔥
▪️FY23 revenue is 49.11 Cr as compared to 38.41 Cr(FY22), 28%✅ growth yoy.
▪️FY23 PAT is 5.03 Cr as compared to 1.15 Cr(FY22), 340%✅ growth yoy.
▪️140%🔥 growth in revenue in last 2 years.
▪️1160%🔥 growth in PAT in last 2 years.
(PAT margins of 1.97% (FY21), 3.01% (FY22), 10.29% (FY23), 19.28% (7m-FY24)✅)
▪️The reason for big jump is that they had done expansion last year and are adding on more and more machinery✅.
📍With the huge Capex the company is doing, we can estimate an easy 50% jump in topline and bottomline for the next year. As they add more and more heavy casting SKUs, their Margins will increase✅🔥.
📌Revenue Projection:-🔥🔥
(based on available information, sector growth, investor chatter and channel checks)
▪️FY24:- Rev: 100Cr+ and PAT: 16Cr+
▪️FY25:- Rev: 160Cr+ and PAT: 26Cr+
✅Tentative order book: 350Cr +🔥
(➡️As per management commentary, they have a 350+ crore order book in hand. Whatever Capex they will install, will have full utilization from day 1)
📌Revenue bifurcation:-
➢Agriculture Sector : 1.05%
➢Automotive Sector : 77.21%
➢Non-Automotive Sector : 19.86% (they have already added more SKUs and increased non automotive share✅ )
➢Power Sector : 1.88%
📍Their working capital cycle is 85-90 days max.
✔️Their clients pay them in 45-60 days max as per prefixed date. The other 15-20 days is the time it takes them to produce the item via several stages.✅
➡️They also have a running inventory in stock for some parts that are in regular demand as per their analysis so that they can supply the clients immediately.💫
📌IPO funds:
From the net proceeds of the IPO funds, it will utilize Rs. 37.3 Cr for capital expenditure and the rest for general corporate purposes.( purchase of machineries For manufacturing of Aluminium Die Casting product.)
📍The machinery had already been ordered in advance. Mainly Japanese machines and some German machines✅. They expect to complete Capex within 3 months.
"QUICK AND PRODUCTIVE DEPLOYMENT OF IPO FUNDS"🔥🔥
📌PEERS:
As per the offer document, the company has shown Endurance Techno and Electrosteel having PE 43 and 18 resp. However, they are not comparable on an apple-to-apple basis.✅
📌CLIENTS:🔥🔥
Schindler, Hyundai, KIA, Maruti Suzuki, Toyota, Mahindra, Tata Motors, Royal Enfield, PYUNG HWA, Yazaki, HL Mando, UCAL, Harting, etc.✅
▪️They are supplier for German company WIKA group, which is manufacturer for many equipment.🔥
▪️supplier for components to Schindler group which is a Swiss multinational company :- elevator, lift Equipment manufacturer.💫
▪️They are supplier for #SDF group- SDF Group is an Italian agricultural machinery manufacturer - is one of the world's leading manufacturers of tractors, combine harvesters, and diesel engines.🚀
▪️Recently they entered into pick vehicles, and medium truck parts for TATA MOTORS, and Ashok Leyland.
▪️Also Hyundai is major auto client. And they have monopoly, eg. Hyundai makes 1 part of a model from ONLY ONE vendor. So it reduces their quality issues, and order for a particular car part continues for all the years the car is in production.💫
▪️In Maruti Suzuki their parts are in the Grand Vitara and New Baleno via Motherson Sumi. And they will be part of future upcoming models too🔥
📌SECTOR GROWTH:
▪️The Indian die casting industry is expected to grow at a CAGR of 15-20% in the next 2 years, driven by factors such as increasing demand from automotive, electronics, and consumer goods sectors.✅
▪️The industry is also expected to benefit from the government's focus on "Make in India" and "Atmanirbhar Bharat" initiatives. These initiatives are aimed at promoting domestic manufacturing and reducing reliance on imports. The government has also taken steps to improve the infrastructure and business environment in the country, which is expected to further boost the growth of the die casting industry.💫
▪️Auto component exports are expected to grow and reach US$ 30 billion in FY26.🔥
▪️The global aluminum casting market was valued at $72.9 billion in 2022, and is projected to reach $124.9 billion by 2032, growing at a CAGR of 5.6% from 2023 to 2032. Increasing usage of aluminum in various applications, such as transportation and telecommunication, is expected to boost market growth during the forecast period.✅
▪️The future will demand lighter materials as compared to Steel & Cast Iron to compensate for the additional weight of lithium ion batteries.
▪️A US study estimates a 6-8% fuel savings✅ for every 10% weight reduction achieved by switching to aluminium in vehicles.
▪️Production Linked Incentive (PLI) schemes on automobile and auto components are expected to bring a capex of Rs. 74,850 crore (US$ 9.58 billion) in the next five years.💫
📌STRENGTH:
➢ Continuous Improvement (KAIZEN Process✅).
➢ Workforce Expertise.
➢ Leadership Excellence.( MD has 30 years✅ of experience and worked with Japanese technologies💫. Hands on man who breathes and dreams his work🔥)
➢ Production Scalability.
➢ Advanced Inspection Systems.🔥
➢ Delivery Commitment.
➢ Specialized Talent Retention.
📌FUTURE PLAN:
▪️Effectively investing in Industry 4.0 technologies to streamline operations, enhance productivity, and drive innovation across all facets of the business.✅
▪️Expanding the offerings to include sub-assemblies and assemblies, leveraging the existing customer base.
▪️Focusing on developing new products that align with the division's core competencies.✅
▪️Focus on consistently meeting quality standards.
▪️Integrating and upgrading the systems for improved efficiency and effectiveness.🔥
📌Disclosure: Not a buy recommendation. only for study and education purpose. Please consult your financial advisor before investing. Please stop investing blindly.🙏🙏