Skipper And Balu Forge Industries Good to Excellent Results, Garden Reach Shipbuilders MOU

Skipper Ltd.

Recent filing: (GOOD TO EXCELLENT RESULTS) For the quarter ending Jun-24 for Skipper Ltd, Sales up 97% YoY from INR 555 Cr in Jun-23 to INR 1092 Cr in Jun-24. Similarly, Net Profit up 2x from INR 16 Cr to INR 32 Cr. On a QoQ basis, Sales down 5% and Net Profit up 28%.

SUMMARY: 5y Operating Profit uptrend | PE 47x (Sector PE range 30-50) | Excellent Jun-24 results | Ace Investor | Promoter Buying | Fund Raise (Rights) | Infra | Capital goods

FUTURE OUTLOOK: As per Q1FY25 investor Presentation, Company has a total order book of INR 5,844 Cr, and a strong Bidding Pipeline of INR 18,000 Cr as of 30th June 2024. Company aims to maintain revenue growth of 25% CAGR over the next 2 years.

• MCap of INR 4,593 Crore (share price = INR 422 / share) (as on 31st Jul ‘24)
• TTM PE 47x (as on 31st Jul ‘24) Retail float = 9.5% (Jul-24)

FOOD FOR THOUGHT: FIIs have reduced stake from 9.9% in Jun-23 to 3.6% in Jun-24.

Q1. What are the Products and Services offered by Skipper?

Company is engaged in the manufacturing of selling of Transmission & Distribution Structures and Pipes & Fittings. Company also takes EPC projects in the infrastructure segment. Skipper is the market leader in the manufacture of T&D structures and distribution poles.

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Balu Forge Industries Ltd.

Recent filing: (GOOD TO EXCELLENT RESULTS) For the quarter ending Jun-24 for Balu Forge Industries, Sales up 56% YoY from INR 112 Cr in Jun-23 to INR 175 Cr in Jun-24. Similarly, Net Profit up 2x from INR 17 Cr to INR 34 Cr. On a QoQ basis, Sales up 9% and Net Profit up 21%.

SUMMARY: 4y Operating Profit uptrend | 7q Operating Profit uptrend | PE 63.1x (Sector PE range 30-50) | Excellent Jun-24 results | Capacity expansion | Fund raise | Promoter Buying | Ace Investor | Institutional Entry | Auto Ancillary

FUTURE OUTLOOK: As per FY24 concall and reiterated in 1QFY25 business update, Company expecting Revenue to conservatively grow in the range of 40%-45% in FY25 over FY24 and EBITDA margins are expected to be in the corridor of 23%-24% in the upcoming quarter.

• MCap of INR 5,108 Crore (share price = INR 498 / share) (as on 31st Jul ‘24)
• TTM PE 63.1x (as on 31st Jul ‘24) Retail float = 9.7% (Jun-24)

FOOD FOR THOUGHT: Large working capital cycle | PE above sector range

Q2. What are the Products and Services offered by Balu Forge Industries?

Company is engaged in the manufacturing of fully finished and semi-finished crankshafts and forged components. It has the capability to manufacture components conforming to both New Emission Regulations & the New Energy Vehicles.

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Garden Reach Shipbuilders & Engineers Ltd.

Recent filing: (MoU) Garden Reach Shipbuilders & Engineers has signed a Memorandum of Understanding (MoU) with Hyderabad-based Medha Servo Drives Pvt Ltd, for the joint manufacture of advanced electrical/electronic equipment and systems. 

Such equipment and systems, to be used both on naval and commercial platforms, will be manufactured under the joint brand name of Medha Servo Drives Pvt. Ltd. and GRSE. The items covered under the MoU include control and monitoring systems, electrical propulsion systems for marine applications and PGD components.

SUMMARY: 6y Operating Profit uptrend | 4q Operating Profit uptrend | PE 78.3x (Sector PE range 50-100) | Excellent Mar-24 results | MoUs | Ace Investor | Institutional holding | Defence

FUTURE OUTLOOK: As per FY24 Concall, Management guides for a 20-25% growth y-o-y over the next 2 years | Orderbook INR 22,653 Cr (Mar-24), 6.3x of TTM Revenue

• MCap of INR 27,995 Crore (share price = INR 2,444 / share) (as on 31st Jul ‘24)
• TTM PE 78.3x (as on 31st Jul ‘24) Retail float = 12.9% (Jun-24)

FOOD FOR THOUGHT: HDFC Mutual Fund (and Others) sold 25L shares (2.2% stake) of the Company in May ‘24

Q3. What are the Products and Services offered by Garden Reach Shipbuilders & Engineers?

Garden Reach Shipbuilders & Engineers, established in 1884, is a premier shipyard in India known for building warships and various vessels for the Indian Navy, Coast Guard, and international clients. Nationalized in 1960, it has produced over 785 platforms, including 100+ warships, and achieved Miniratna status in 2006.

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