Birla Cable Ltd -Multibagger Stock Analysis 2023
In this article, we can see Birla Cable Ltd as a Potential Multibagger Stock as on September 2023.
Birla Cable Ltd
Birla Cable Limited belongs to M P Birla group and is engaged in manufacturing and sales of all types of Optical Fibre Cables, Copper Telecommunication Cables, Structured Copper Cables, Specialty cables and allied accessories. Shri Harsh V. Lodha is the current Chairman. SHRI R.SRIDHARAN is the current MANAGER & CHIEF EXECUTIVE OFFICER.
The Company’s main business activities are manufacturing and sales of all types of Optical Fiber Cables, Copper Telecommunication Cables, Structured Copper Cables, Specialty cables, and allied accessories.
Optical Fiber Cables: 48% in FY22 vs 50% in FY21,Copper Structured Cables: 49% in FY22 vs 46% in FY21
Geography Wise Revenue Split
Domestic Sales: 61% in FY22 vs 62% in FY21 , Export Sales: 39% in FY22 vs 38% in FY21
The Co caters to a reputed client base like Bharat Sanchar Nigam Limited, Mahanagar Telephone Nigam Limited, Indian Railways, Defence (Indian Army), NTPC Limited, Steel Authority of India Limited, Bharti Airtel Ltd, Reliance Jio Infocom Ltd, etc
EPC and turnkey solutions segments
The company has also recently ventured into the EPC of water sanitation projects by bagging a water sanitation order of ₹5,498 Cr from the State Water Sanitation Mission, Uttar Pradesh Government.
Birla Cable Ltd is headquartered in Madhya Pradesh. The company had branches in AHMEDABAD, Bangalore, Chennai, Goa, Gurugram, Hyderabad, Kolkata, Mumbai, NEW DELHI and UAE.
Shri Harsh V. Lodha is the current chairman. An eminent Chartered Accountant who has served various committees and working groups set up by the Federation of Indian Chambers of Commerce and Industry (FICCI); Indian Chambers of Commerce, Kolkata; Department of Company Affairs, Government of India; Reserve Bank of India; apart from being a member of the Accounting Standards Board set up by the Institute of Chartered Accountants of India and alternate member of the National Advisory Committee on Accounting Standards set up by Government of India. He has handled professional advisory assignments in various fields and has been involved in various Trusts, Educational and Cultural Institutions.
SHRI R.SRIDHARAN is the current company Executive with rich Technical and marketing expertise.
Shri D. R. Bansal is on the board of the company. Company Executive having rich and varied experience of over 5 decades in various facets of cable and other Industries including in the field of administration, production, and marketing. His strength also includes strong relationship management, international alliances/tie-ups, and business development. He is actively associated with various cable industry forums in India and abroad and also served at the helm of all renowned power and telecommunication cables industry association(s) in India for several years.
Shri Arun Kishore is on the board of the company. Shri Arun Kishore holds a Bachelor’s Degree in Commerce from Punjab University (Chandigarh Campus). He is a fellow member of the Institute of Chartered Accountants of India. He possesses varied post-qualification experience of about 54 years. He was in Industry a senior position for 3 years. He provides professional services in the fields of Taxation, Audit, Finance, Tax Planning, etc. He was on the Board of Securities Trading Company (NSE member) for nearly 20 years. He is an advisory Director with a VSLI/Chip Designing Company.
Shri K. Raghuraman is on the board of the company. Chartered Accountant with more than three decades of professional experience in various Banks and holding very senior positions including executive directorship of Punjab National Bank. He held the position of Chairman of the India Cooperation Committee of Master Card International & was also the Honorary Secretary of the “Banks’ Sports Board” of the Indian Banks’ Association apart from being a member of various industry level Committees of IBA. He has participated in various International Conferences/Seminars/Investors’ Meetings in Australia, China, Bangkok, USA, Canada, etc.
- The promoters have pledged 6.28% of their holdings.
- The Co’s outstanding order book position as of September 30, 2022, stood at ₹6,859 crore vs ₹1,198 crores, as of September 30, 2021.
- The Company has a manufacturing plant at Rewa, Madhya Pradesh with a total capacity of ~60 lakh fiber km.
- The company continued its focus on judicious capital allocation and incurred capital expenditure aggregating to
2324.22 lakhs, consisting of addition to (a) Plant & Equipment of2191.45 lakhs; and (b) Other Fixed Assets of 133.77 lakhs for further capacity expansion/augmentation.
- Average net profit of the Company: 1341.00 Lakhs.
- The revenue from operations increased by 47.95% to
79219.75 lakhs during the financial year 2022-23 as compared to53544.73 lakhs during the previous year, primarily due to a reasonable increase in order flow, especially from long-term customers.
Products & Services
- Fibre optic aerail cable – untube
- Fibre optic aerial cable – FIG-8
- Fibre optic underground/duct cable – Unitube
- Fibre optic underground / Duct dielectric cable multitube
- Fibre optic microduct cable- unitube
- Fibre optic microduct cable-multitube-single sheath
- super lean 200-micron cable
- Fibre optic micromodule cable – unitube
- Fibre optic FTTX single sheath cable – multitube
- super lean 200-micron cable
- Fibre optic FTTX flat drop cable
- specialty cables
- Indoor cables-untube
- Telecom fibre accessories
- structured cables
Profit & Loss
- The additions to the Fixed Assets of ` 2324.22 lakhs during the year are mainly on the expansion of the existing manufacturing capacity of the Company.’
- Reduction in requirements of resources by streamlining Fttx Premises sheathing line. High fiber count micro cable with CSM can be processed directly from loose tube without performing S/Z operation separately. Now can produce multi tube design cable directly from Premises cable line by eliminating the need of S/Z operation.
- A unique and cost-effective design of air blown micro cable 2.5 mm diameter is developed for European market. This design is more economical as we are getting excellent blowing performance by using special loose tube material.
- We have installed a coiler in Sheathing line for domestic CATV market which can produce 2-3 km coil directly from Sheathing line.
- Company is expected to give good quarter
- Company has been maintaining a healthy dividend payout of 26.6%
- Company’s median sales growth is 47.3% of last 10 years
- Price to earnings ratio (21.9x) is below the Indian market (28.4x)
- Earnings grew by 93.3% over the past year
- Intrinsic Value Discount above 60%
- Power of Birla Brand
- Stock is trading at 4.00 times its book value
- Company has a low return on equity of 11.6% over last 3 years.
- Contingent liabilities of Rs.1,925 Cr.
- Highly volatile share price over the past 3 months
- Debt is not well covered by operating cash flow
- Promoter Pledged Shares exists
- Earnings have declined by 5% per year over past 5 years
- Other Income exists in P&L
Warren Buffett Checklist
Based on above evaluation the company have multibagger properties.
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