Atam Valves Ltd
– Multibagger Stock Analysis 2023
In this article, we can see Atam Valves Ltd as a Potential Multibagger Stock as on September 2023.
Atam Valves Ltd
AVL is engaged in the manufacturing, production and sale of all types of valves, cocks, boiler mounting, pipe fittings, sanitary fitting, and fabrication of steel and iron or non-ferrous metal and by-products. Atam Valves markets its products worldwide. Mr. Vimal Parkash Jain (Promoter) has around 4 decades of experience in the Valves industry and he is the current Chairman. AMIT JAIN is the current Managing Director.
Capacity & Capacity Utilization
Capacity: 1.48 Lakh units in FY20 vs 2.57 Lakh units in FY17 (Capacity Utilizations at 56% for both FY17 & 20).
Major Customers & Suppliers (FY20)
The top 5 customers contribute 23% to revenue and their top customer contributes 6% to the revenue.
65% of the raw material is procured from Top 5 suppliers and 26% of the raw material is procured from 1 supplier.
Clients
Some of their customers include Bharat Petroleum Corporation Limited, Indian Oil Corporation, Adani, Thermax, BHEL, NTPC, Adani, Rail Coach Factory, Indian Railways and many more.
Geographical Split (FY20)
Domestic: 97% & Exports: 3%
They export to more than 13 regions, viz., United States, Kuwait, Kenya, South Africa, Malaysia, Dubai, Indonesia, Australia, Oman, etc.
Industries Catered
They cater to industries like Boiler manufacturers, Oil Refineries, Pharmaceuticals, Rubber tyre Industries along other rubber industries etc.
Website
Location
company is involved in the Manufacture of Basic Iron & Steel headquartered in Jalandhar, India.
Leaders
Vimal Parkash Jain founded Atam Valves Ltd. Presently, Vimal Jain is currently associated with 3 Companies and is director with Atam And Febi Valves Private Limited, Febi Valves Private Limited. As a Whole Time Director with Atam Valves Limited.
The total paid-up capital of all companies where Vimal Parkash Jain holds active positions is ₹105,782,000.00.
AMIT JAIN is the current chairman. In 2006, he opened a small office in his garage and incorporated the software company Ginarsoft along with his brother Anurag. In 2008, After attending the auto expo in New Delhi, they decided to start the Cardekho portal, On which they provided users with reliable information and reviews on used and new cars, After their portal CarDekho flourished, they launched various other ventures like insurancedekho, Bikedekho, and Collagedekho. under his leadership, carDekho underwent many key acquisitions including Gaadi in 2014, Zingwheels in 2015, PowerDrift in 2018, and Carmudi Philippines in 2019.
Pamila Jain is the current Chief Financial Officer and Whole Time Director. independent consultant with over 25 years of experience in the oil and gas industry and multiple SAP implementations, including S/4Hana release, providing configuration, functional, conversion, and integration support within SAP FI and JVA modules as well as SAP Security management. Extensive business analysis skills in process reviews, requirements gathering, and creating functional and technical spec documents for software design and upgrades. Excellent QA software testing skills in establishing test plans and writing test scripts to pinpoint software defects, track bugs, and validate functionality within SAP and non-SAP sysajni Sharma is on the board of Atam Valves Ltd. and Principal at Manav Sehyog SchooShe received a graduate degree from Guru Nanak Dev University.
Surinder Kumar Salwan is on the board of Atam Valves Ltd. He received an undergraduate degree from Punjab Engineering College. registered with the Ministry of Corporate Affairs (MCA), bearing DIN 08510741. Surinder Salwan is currently associated with Atam Valves Limited appointed as Director and the paid-up capital Atam Valves Limited ₹105,480,000.00.
Highlights
- Atam Valves Limited has developed a strategic roadmap to drive company growth and solidify the company leadership position. company strategy revolves around three key pillars: Innovation, Sustainability, and Customer-Centricity.
- By executing this strategy, the company is poised to achieve sustainable growth, increased market share, and enhanced brand reputation.
- The Asia-Pacific region is expected to dominate the market and witness the highest growth rate, owing to the rapid industrialization, urbanization, and infrastructure development in countries like China, India, Japan, and South Korea.
- In response, Atam Valves Limited maintains a proactive risk management approach, emphasizing rigorous assessment, innovation, and a commitment to quality to navigate these challenges while pursuing sustained growth and industry leadership.
- The total employee strength of the Company was 196 on 31st March 2023., which is the backbone of the success and growth of the Company.
Products & Services
- By Type
- By Material
- By Standard
- By End Connection
- By Suitability
Profit & Loss
Expansions
- The current year will be exciting as Atam Valves is making an attractive diversification. Company adding a new vertical to our business—bathroom fittings.
- Marketed under the ‘Delle’ brand, company bathroom fitting, currently outsourced, will cater to this market segment. the company expects to commence operations of a company manufacturing facility in FY24, after which the company will manufacture all products in-house and focus on widening its range to align with customer’s aspirations.
- In the company’s existing business, the company will focus on manufacturing valves using special-grade inputs, which are in high demand in India and across the globe. This should help the company grow international business significantly over the coming years.
Positives
- The company has delivered good profit growth of 71.9% CAGR over the last 5 years
- The company has a good return on equity (ROE) track record: 3 Years ROE 27.2%
- The company has been maintaining a healthy dividend payout of 42.8%.
- Price-to-earnings ratio (24.5x) is below the Indian market (27.6)
- Earnings grew by 269.8% over the past year
Negatives
- Stock is trading at 7.54 times its book value
- Company might be capitalizing on the interest cost
- Debtor days have increased from 115 to 148 days.
- Does not have a meaningful market cap (2B)
- Dividend of 0.84 is not well covered by cash flows
Warren Buffett Checklist
| Factor | Value |
| Economic Moat | Moderate |
| Growth | Moderate |
| Valuation | Good |
| Debt | Good |
| Integrity | Good |
Summary
Based on above evaluation the company have multibagger properties.
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