Shivalik Bimetal Controls Ltd. (NSE:SBCL) was incorporated in 1984 as a private limited company under the name Shivalik Bimetal Controls Private Limited. Later, in 1985, the company was converted into a joint-stock company and subsequently its name was changed to its current name. In February 1986, the company came up with its initial public offering.
SBCL is engaged in the manufacturing and sales of Thermostatic Bimetal / Trimetal Strips, Components, Spring Rolled Stainless Steels, Multi Gauge EB Welded Products, Cold Bonded Bimetal Strips and Parts etc. under one roof.
The company uses a mixture of different metal alloys to manufacture its products, including nickel-based alloys, copper and other durable alloys. It offers precisely manufactured components specific to customer application requirements.
It is the largest manufacturer of multi-metal products in the general power electronics industry, combining its specialized expertise and quality assurance to create cost-competitive, energy-efficient, precision-manufactured components and surface mount (SMD) devices. Its units are in Chambaghat, Himachal Pradesh.
Construction of Unit IV factory building was completed and trial operation started in H1FY23. Construction of the Unit I factory building was completed on adjacent land and was fully operational in 2Q2022. This could lead to organic growth opportunities during FY23 and FY24.
SBCL posted a 58% year-on-year growth in its top line, which stood at Rs. 111 Cr in Q1FY23. The increase in sales was driven by robust year-over-year volume growth and higher realization on a consolidated basis.
All business segments saw secular solid double-digit growth: Thermostatic Bimetal/Trimetal Strips grew 44.08% YoY to Rs. 49.06 Cr and grew by 9.76% quarter-on-quarter; while shunt resistances grew by 34.24% YoY to Rs. 48.60 Cr and grew by 8.78% quarter-on-quarter.
In Q1FY23, thermostatic bimetal/trimetal tape revenue compromised 49.09% of total revenue, while shunt resistors accounted for 48.63% of total revenue.
As one of the few manufacturers of bimetallic parts and shunt resistors in India, SBCL faces limited competition. It has been the sole supplier for many OEMS for over 30 years. The company provides a wide range of applications, including switchboards, energy meters and electrical applications, and automotive and electronic equipment.
Over the years, the company has built a strong reputation in the bimetal/trimetal and shunt resistor industry in both the domestic and export markets. Due to its long history of operation, the company has strong relationships with its clients and boasts a strong and trusted client base consisting of major domestic players as well as international players. Dealer approval in the automotive industry is a lengthy process (3-4 years) and this acts as a natural barrier to entry for competitors.
SBCL’s clients in the bimetal space include Schneider Electric (India) Private Limited, Havells India Limited, Larsen & Toubro, etc. In the EV space, BMS manufacturers such as Continental Engineering Servicer, Marquadt, Hella and Denso act as Tier I suppliers to Original Equipment Manufacturers (OEMs ) and acts as Tier 2 suppliers to companies such as Vishay Intertechnology, Isabellenheute and Rohm.
Shivalik operates as a Tier 3 manufacturer and its customers are largely made up of Tier 2 manufacturers. According to its export data, Vishay Intertechnology is Shivalik’s largest customer.
SBCL dominates the specialty side resistor and thermostatic bimetal industries. The company has ~90% market share in domestic markets and ~15% market share in global markets for thermostatic bimetals. It is also the leader in lateral resistance.
Contribution of shunt resistors increased from 14% in FY16 to ~50% in FY21. The company provides a wide range of applications, including switchboards, energy meters and electrical applications, and automotive and electronic equipment.
SBCL’s medium to long-term business remains positive due to the diverse uses of its products. Government policies conducive to the growth of the smart metering, EV and switchgear market is a major promising sign.
While healthy growth is expected in all sectors that SBCL caters to (switchgear, metering, power electronics and automotive), the most promising market for the company in the medium term will be the EV sector, as the company’s products will find many applications not only in the electric vehicle itself, but also in charging stations will require both switching devices and current sensing resistors due to charging stations.