Baheti Recycling Industries Ltd
– Multibagger Stock Analysis 2023
In this article, we can see Baheti recycling Industries as a Potential Multibagger Stock as on September 2023.
Baheti Recycling Industries Ltd
Baheti Recycling Industries Limited is an aluminium recycling company. The company is primarily engaged in processing aluminum-based metal scrap to manufacture (i) aluminum alloys in the form of ingots and (ii) aluminum de-ox alloys in the form of cubes, ingots, shots, and notch bars. Mr. Shankerlal Bansilal Shah is the current Chairman and whole-time Director. Mr. Balkishan Shankerlal Shah is the current managing director.
Clientele list
ArcelorMittal Nippon Steel India, Tata Steel, Minda Corporation, Sigma Electric, Sunflag Iron & Steel Co. Ltd. etc. Top five customers for accounted for 60.94% and 51.76% of FY22 and FY21 sales.
Revenue Bifurcation
Aluminium Cubes – 26.78% in FY21 vs 30.63% in FY22 Aluminium Ingots – 5.03% in FY21 vs 3.07% in FY22 Aluminium Shots – 1.74% in FY21 vs 3.60% in FY22 Aluminium Notchbar – Nil in FY21 vs 3.53% in FY22 Aluminium Alloy Ingots – 50.52% in FY21 vs 47.41% in FY22 Aluminium Ash/Dross – 0.06% in FY21 vs 0.07% in FY22 Trading Activities – 15.87% in FY21 vs 11.69% in FY22.
Business Area
Baheti Recycling Industries Ltd. (BRIL) is an aluminium recycling Company, engaged in processing aluminium-based metal scrap to manufacture (i) aluminium alloys in the form of ingots and (ii) aluminium de-ox alloys in the form of cubes, ingots, shots and notch bar.
Manufacturing Facilities
Baheti Recycling Industries’ manufacturing unit is situated at Dehgam (Gandhinagar, Gujarat) and has a 12,000 MT installed capacity for processing aluminium. Its manufacturing facility is strategically located near some of its customers’ manufacturing facilities allowing it to optimize deliveries, reduce lead times and facilitate greater interaction with customers.
IPO Details
Co. intends to raise 12.42 Crs through the IPO which will be utilised for:
1. Modernization and expansion of the existing manufacturing units.
2. To meet Working Capital requirements.
3. General Corporate Purpose.
4. To meet issue expenses.
Website
Location
Baheti Recycling Industries Limited is an aluminium recycling company. headquartered in Gujarat.
Leaders
Mr. Shankerlal Bansilal Shah is the Chairman and Whole Time Director of the Company. He has been on the Board since incorporation. He is a visionary entrepreneur and has played a pivotal role in expanding the business operations of the Company. He has a work experience of more than 35 years in the metal industry. He currently looks after the overall management and administration of the Company Under his guidance, our Company has witnessed continuous growth.
Mr. Balkishan Shankerlal Shah is the Managing Director of the Company. He has an experience of around 10 years in the metal industry. He is currently overseas and controls the production and purchase operations of our Company. He completed a post-Graduate Program in Management (Family Managed Business) from S.P. Jain Institute of Management and Research, Mumbai in 2010.
Mr. Yash Shankerbhai Shah is the Joint Managing Director of the Company. He completed his Bachelor of Commerce from Ahmedabad University in 2014 and his Postgraduate program in Global Management Business from SP Jain School of Global Management in 2016. He has an experience of around 6 years in the metal industry. He currently oversees and controls the marketing and finance operations of the Company.
Ms. Ayushi Yash Shah is the Non-Executive Director of our Company. She has an experience of over 2 years in the field of finance. She completed her Master in Business Administration(Finance) from Mohanlal Sukhadia University, Udaipur in 2017.
Highlights
- During the year under review, the revenue from the operation of the Company stood at INR 35,996.29 Lakh as against INR 24,839.76 Lakh for the previous year. Revenue from the operation of the Company increased by 44.91% over the previous year.
- Profit before Tax for the financial year 2022-23 stood at INR 695.77 Lakh as against Profit before Tax of INR 405.64 Lakh making a net profit of INR 528.40 Lakh for the financial year 2022-23 as against the net profit of INR 292.95 Lakh for the financial year 2021-22. Due to an increase in raw material prices, operating, and other expenses, the Company could not generate more profit even though increase in revenue from operations.
- The Board is making continuous efforts to re-visit the purchase policy of the Company and increase the capacity utilization of manufacturing capacity thereby achieving a reduction in the fixed cost and manual intervention in the production will lead the Company to generate profit in the coming years.
- Baheti Recycling Industries’ manufacturing unit is situated at Dehgam (Gandhinagar, Gujarat) and has a 12,000 MT installed capacity for processing aluminium. Its manufacturing facility is strategically located near some of its customers’ manufacturing facilities allowing it to optimize deliveries, reduce lead times and facilitate greater interaction with customers.
- The company believes that human capital is the key contributor to business growth and competitiveness. This includes not only the employees of the Company but also the skilled labor engaged at factory units and through sub-contracting.
- The company markets its products in 12 states & Union Territories in India. Baheti Recycling Industries Limited also sell our products to foreign buyers located in Japan, Canada, the USA, China, Hong Kong, UAE, Taiwan etc. The Exports contributed 9% of FY22 revenue vs 12.7% in FY21.
Products & Services
- Aluminium alloy ingots
- Aluminum notch bar
- Aluminium shots
- Aluminium cubes
- Aluminium ingot
Profit & Loss
Expansions
- The number of employees as of 31st March 2023 was 256 against 240 employees on the payroll of the company during the previous financial year. The company has during the year under review maintained excellent industrial relations at all levels. This has ensured that we have a committed and dedicated workforce with a high level of fervor
- BRIL is engaged in trading scrap materials such as aluminum scrap, brass scrap, copper scrap, zinc scrap, etc which contributed 11.7% of its FY22 revenue. As of October 31, 2022, the company has 275 employees on its payroll.
Positives
- The company has delivered good profit growth of 78.7% CAGR over last 5 years
- Earnings grew by 81% over the past year
Negatives
- Stock is trading at 5.60 times its book value
- Though the company is reporting repeated profits, it is not paying out the dividend
- Interest payments are not well covered by earnings
- Does not have a meaningful market cap (2B)
Warren Buffett Checklist
| Factor | Value |
| Economic Moat | Moderate |
| Growth | Good |
| Valuation | Moderate |
| Debt | High |
| Integrity | Moderate |
Summary
Based on above evaluation the company have multibagger properties.
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