Sample  write-ups  
 Swiss Glascoat Equipments   
Vol. No. : 25    Issue No. : 23                             Friday, April 19, 2019

Shining growth

Increased capex in chemical industry is leading to sustained growth for the company

Related Tables
4Swiss Glascoat Equipments: Financials
4Swiss Glascoat Equipments: Results

Idea Swiss Glascoat Equipments
BSE Code 522215
BSE Group X
NSE Code Not listed
ISIN Demat INE461D01010
Bloomberg SWGE@IN
Reuters SWGE.BO
Par Value Rs 10
52-week High/Low Rs 219 / Rs 145
Current Price Rs 177 on BSE (as on 18 April 2019)

Swiss Glascoat Equipments (SGEL) is engaged in the business of manufacturing/ fabrication of specialized engineered Glass-lined Reactors and Vessels, which are predominantly used by the Pharmaceutical and Chemical (including Agrochemical) manufacturers.

Glass-lining is a specialized coating of glass, which is applied on the chemical reactor vessels/ equipment. Glass-lined equipment are used for preventing corrosion caused by reactions of corrosive chemicals by the Pharmaceuticals, Agrochemical and other Chemical Industries. The Glass Lining Industry has gone through tremendous changes during the last two decades. The core element of the Glass Lining Industry lies in the technology used for manufacturing of glass frit and its applications/ lining on the vessels/ equipment.

The company specializes in design and manufacturing of Carbon Steel Glass Lined Equipment viz. Reactors, Receivers / Storage Tanks, Driers, Filters, Columns, Agitators, Valves, Pipes & Fittings. It caters to requirement of leading Pharmaceutical / API, Specialty Chemicals, Dies / Colors, Agro Chemicals, Food Processing and allied Industries.

Glass Lined Equipments are manufactured to the highest Quality Standards of workmanship and material. The Reactors are generally as per DIN 28136 standard and manufactured in accordance with ASME Code for unfired Pressure Vessel, Section VIII Division I. All Clamps and Flanges Comply with ANSI / DIN Standard, Equipment are also specially designed and constructed to the client's own specifications.

The company's equipment has a high brand recall amongst its existing customers as well as generally in the Industry.

The company is a one-point solution-provider

By consolidating quality, performance, engineering design, service and much more, Swiss Glascoat has established itself as One-Point Solution-Provider for glass-lined products of any type, size, output including a complete range of accessories. Today, with the support of its customers, the company is ahead of the curve in terms of technology, processes and people in this exciting segment.

December 2018 quarter financial performance

In quarter ended December 2018, sales grew 31% to Rs 30.79 crore. OPM improved 120 basis points to 12.8% which saw OP grow 44% to Rs 3.95 crore.

Other income jumped from rs 7 lakh to Rs 21 lakh and interest cost went up 49% to Rs 54 lakh. As depreciation grew 6% to Rs 81 lakh, PBT grew 67% to Rs 2.81 crore. After providing for taxation, (up 41% to Rs 74 lakh), PAT grew 79% to Rs 2.07 crore.

Nine months results are also impressive

During the nine months sales grew 33% to Rs 86.32 crore. OPM improved 50 basis points to 11.2% which saw OP rise 39% to Rs 9.63 crore. PBT grew 66% to Rs 6.65 crore. As tax grew 28% to Rs 1.67 crore (tax incidence fell from 32.4% to 25.0%) PAT rose 84% to Rs 4.99 crore.

Healthy outlook

The various Government and Reserve Bank initiatives like 100% FDI in the Pharmaceuticals sector under automatic route, reduction in the interest rates, etc. is already providing opportunities to expand the company's business.

In the recent past the company has witnessed lot of activity to participate in the capex program of many of its existing and potential customers, from the pharma and agrochemical/ specialty chemical sectors, which had earlier slowed down.

The company's philosophy to provide the best quality at a competitive price, continuously innovating its existing processes and introducing new technologies (automation and process improvement) will give lot of thrust and impetus to its operations and order book.

Almost all the major Indian glass lined equipment end users have used and are satisfied with its products. Now, the company has intensified its marketing efforts and service network to strengthen its domestic and global presence and is receiving positive, encouraging response.

With production of many chemical and chemical products shifting from China to India due to more stringent pollution control norms in China, lot of capex is happening in India in chemical industry which is benefiting SGEL.

Valuation

In FY 2019 and FY 2020 we expect the company to register EPS of Rs 11.6 and Rs 14.0 respectively. The scrip trades at Rs 177. P/E on FY 2020 projected EPS works out to 12.6.

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Swiss Glascoat Equipments: Financials
 
  1603 (12) 1703 (12) 1803 (12) 1903 (12P) 2003 (12P)
Sales 92.42 81.47 96.65 123.21 140.46
OPM (%) 12.3 11.8 10.6 11.2 11.8
OP 11.35 9.62 10.21 13.78 16.63
Other inc. 0.55 0.26 1.01 1.36 1.47
PBIDT 11.90 9.88 11.22 15.14 18.10
Interest 3.38 2.60 1.44 1.99 2.34
PBDT 8.52 7.28 9.78 13.15 15.76
Dep. 2.26 2.55 3.04 3.13 3.44
PBT 6.26 4.73 6.75 10.03 12.32
Total Tax 2.11 1.61 1.39 2.51 3.20
PAT 4.15 3.12 5.36 7.52 9.12
EPS (Rs) * 6.4 4.8 8.2 11.6 14.0
*Annualised on equity of Rs 6.50 crore: Face value of Rs 10 each
EO: Extraordinary items
EPS is adjusted after EO and relevant tax
(P): Projections
Figures in crore,
Source: Capitaline Databases

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Swiss Glascoat Equipments: Results
 
  1812 (3) 1712 (3) Var. (%) 1812 (9) 1712 (9) Var. (%) 1803 (12) 1703 (12) Var. (%)
Sales 30.79 23.59 31 86.32 64.95 33 96.65 81.47 19
OPM (%) 12.8 11.6   11.2 10.7   10.6 11.8  
OP 3.95 2.74 44 9.63 6.95 39 10.21 9.62 6
Other inc. 0.21 0.07 219 0.62 0.26 133 1.01 0.26 289
PBIDT 4.16 2.81 48 10.24 7.21 42 11.22 9.88 14
Interest 0.54 0.36 49 1.26 0.93 37 1.44 2.60 -45
PBDT 3.62 2.44 48 8.98 6.28 43 9.78 7.28 34
Dep. 0.81 0.76 6 2.33 2.28 2 3.04 2.55 19
PBT 2.81 1.68 67 6.65 4.01 66 6.75 4.73 43
Total Tax 0.74 0.52 41 1.67 1.30 28 1.39 1.61 -14
PAT 2.07 1.16 79 4.99 2.71 84 5.36 3.12 72
EPS (Rs) * # #   # #   8.2 4.8  
* on equity of Rs 6.50 crore: Face value of Rs 10 each
#EPS not annualized due to seasonality in business EO: Extraordinary items
EPS is adjusted after EO and relevant tax
Figures in crore,
Source: Capitaline Databases

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