Chaman Metallics Ltd-Multibagger Stock Analysis 2023
In this article, we can see Brightcom Group Ltd as a Potential Multibagger Stock as on October 2023.
Chaman Metallics Ltd
Chaman Metallics Ltd manufactures and sells Iron and Steel. Mr. Chetan Kumar Agrawal is the current Chairman and Managing Director. Mr. Keshav Kumar Agrawal is the current Joint Managing Director and Chief Financial Officer.
Capex:
The group has undertaken a capex in CML to install:
a) one new sponge iron plant with a capacity of 350 TPD
b) A billet unit (3 x 20 MT)
c) One cast iron unit (3 x 4 MVA)
d) One 12 MW Waste Heat Recovery based captive power plant
e) One 12 MW Coal Fuel based captive power plant.
The project commenced in July 2022 and the commercial operations are expected to start by July 2024. The
total cost of the project is Rs.296 Cr, out of which Rs.180.00 Cr will be funded through term loan and the balance from promoters’ sources.
Revenue Breakup – FY23:
Sale of Finished products ~98%,
Sale of by-products ~2%
IPO Details
The company raised 24.13 Crs through the IPO and got listed on the SME, NSE EMERGE on 16th January 2023.
Business Overview:
The company is a part of GS Group which is a manufacturer of ISI Grade MS Ingots and TMT Bars. Through its sponge iron business, the company caters to the metallic requirements
of steel producers in selected geographies
Production Capacity:
The company has a manufacturing unit in Tadali, Maharashtra, with an installed capacity of 60,000 MTPA of sponge iron.
Website
Location
Chaman Metallics Ltd is headquartered in Maharashtra. The company had a branch in Raipur.
Leaders
Mr. Chetan Kumar Agrawal is the current Chairman and Managing Director. Mr. Chetan Kumar Agrawal is an Industrial Engineer and a Diploma holder in Business Management. Having proved his mettle in multiple projects in the group since 2009, he is credited for making quality as an integral value of the group. He is also known for his innovative ideas, a deep understanding of the industry dynamics and also for his astute management skills. He is the group’s in-house entrepreneur and also an active member of the International Entrepreneur’s Organization (IEO).
Mr. Keshav Kumar Agrawal is the current Joint Managing Director and Chief Financial Officer. Mr. Keshav Kumar Agrawal is a commerce graduate and a Chartered Accountant by profession. Since joining the group in 2014, he has been responsible for managing the operations of Induction Furnaces, Rolling Mills, Finance, and Legal matters of the business. He manages functions like corporate finance, legal aspects, cost management, and financial planning in the group. He has been guiding the group to manage its financial and other resource in a highly efficient way. He has played the crucial role of infusing new ideas that have changed the Group’s outlook.
Mr. Ramesh Kumar Agrawal is the current Non-Executive Director. Mr. Ramesh Kumar Agarwal transformed the small steel rolling mill into a profitable, integrated, and well-diversified group ready for tomorrow. Over the last 30 years, the group has emerged as a formidable force in the industry with a turnover exceeding INR 1000 Crore. His tremendous hands-on experience, strategic thinking, and a forward-looking approach. He has played a crucial role in developing Chhattisgarh’s Steel Industry besides playing an active role in various social activities, industry events, and various economic forums.
Mr. Ranjeet Singh Thakur is the current Independent Director. Mr. Ranjeet Singh Thakur, S/o Late M. R. Thakur aged 71 years, residing in Raipur, has a Master’s degree in M.Sc.(Chemistry), AMIE (Chemical) ISO – 9001 from the UK has around 45 years of sound experience in the field of Cement and Steel Sector, and also has expertise in Railway siding construction, Operations, Production, Quality control, Mining, Commercial, Administration, Procurement, Logistics, Liaisoning, etc. Mr. Thakur is also having sound entrepreneurial skills.
Mr. Sumit Dahiya is the current Independent Director. Mr. Sumit Dahiya is a qualified Chartered Accountant and a commerce graduate with an experience of more than 8 years. He is associated with our Company since 2022. He has experience in the field of internal checks, tax expertise, corporate financing, and legal compliance in various business sectors such as manufacturing, steel industries, contractors, logistics, transportation, etc. At present, he exercises independent oversight relating to corporate finance, cost management, and financial operations in the Company.
Highlights
- Total Income for the year increased by 23.46% to Rs 22,897.69 Lakhs as compared to Rs 18,546.32 Lakhs achieved during the previous Financial Year.
- EBITDA for the year increased by 73.39% to Rs 2,747.21 Lakhs as compared to EBITDA of Rs 1,584.41 Lakhs achieved in the previous Financial Year.
- Profit after Tax (PAT) increased by 108.76% to Rs 1,709.64 Lakhs as compared to a net profit of Rs 818.95 Lakhs in the previous Financial Year.
- The overall financial performance of the Company during the current financial year has improved significantly as compared to the previous financial year.
- Revenue from operations from the sale of sponge iron, dollar and other items (iron ore fines, dust, and waste scrap) contributed 98.03%, 0.96%, and 1.01% respectively
- The Company’s EBITDA has increased by 73.39% to Rs. 2,747.21 Lakhs from 1,584.41 Lakhs as compared to the previous financial year
- The Company’s Net Profit after Tax has increased by 108.76% to Rs. 1,709.63 Lakhs from Rs. 818.95 Lakhs as compared to the previous financial year
- The Company’s EPS has increased by 93.72% to Rs. 8.93/- from Rs. 4.61/-.
- The Company is focused closely on Cost Control and Working Capital Management. This will enable the company to increase its Turnover as well as Profitability and the Company is looking forward to increasing its profit in the coming financial years with the support of all the Stakeholders of the company.
Products & Services
- Sponge Iron
- MS Ingot
- Re-rolled Products & SGCI Insert
- Cast Iron
Profit & Loss
Expansions
- On August 30, 2023, the company awarded a Work Order to Boilcon Enterprise for WHRB and AFBC Boiler erection of pressure parts, structure, Ducting & piping under the Expansion Project, for Rs. 3.98 Cr
- On October 19th, 2023, the company awarded an Order for the construction of building structure, fabrication & erection of 3 x 4 MVA furnace equipment under the expansion project, to Maa
Durga Construction for Rs. 2.34 Cr - On October 19th, 2023, the company awarded an Order for the erection and commission of a water treatment plant under the expansion project, to Thermax Limited for Rs. 2.35 Cr
- On August 20, 2023, the company received approval for a building plan from the Maharashtra Industrial Development Corporation (MIDC)
- With the proposed expansion the Company will focus on forward as well as backward integration and the Installation of a waste heat recovery boiler will not only reduce the power cost by generating power using waste heat gases from the process. The project activity enables a reduction in CO2 emissions and saves conventional fuel.
Positives
- The company has delivered good profit growth of 63.6% CAGR over the last 5 years
- The company has a good return on equity (ROE) track record: 3 Years ROE 26.3%
- Price-to-earnings ratio (9.3x) is below the Indian market (27.7x)
- Earnings grew by 108.8 % over the past year
Negatives
- Though the company is reporting repeated profits, it is not paying out dividend
- Does not have a meaningful market cap (2B)
- Volatile share price over the past 3 months
Warren Buffett Checklist
| Factor | Value |
| Economic Moat | Moderate |
| Growth | Good |
| Valuation | Good |
| Debt | Moderate |
| Integrity | Good |
Summary
Based on above evaluation the company have multibagger properties.
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