Recently, while screening for stocks for our Premium Members, I came across Sealmatic India Ltd.
It’s a small company with 100 crore sales turnover; however, it manufactures a niche product – Mechanical Seal, which is used in multiple industries like, Oil & Gas, Nuclear Power, Chemicals, Pharma, etc.
The EBITDA margins are high around 20-25%. Company has expanded capacity by 65% and targeting 15-20% annualized sales growth for next 3 years
Below, we have shared notes from June 2025 concall of the company to understand management’s perspective on growth plans and guidance for next few years.
Before that: Here’s the list of new recommendations released in last few weeks:
- For Alpha/Alpha + members – On 9th Oct’25, we released a new long term investment recommendation for Alpha and Alpha + members. It deals in Protective Gear with strong sector tailwinds. Co. has spent ~200 crore on capacity expansion in last 3 years and management is targeting 2x sales in 3 years. You can access it by signing up HERE
- For Insider Bets members – Recently, we released our 5th stock report under “Insider Bets“ subscription. Herein the company’s performance has turned around with strong growth in PAT in FY 25 and management is targeting PAT margin to improve 3x. You can access it by signing up HERE
Sealmatic India June 2025 concall notes
Source: Sealmatic Jul’24 Presentation
Sealmatic India Ltd – FY25 Earnings Summary
- Overview:
- Reported robust FY25 performance, driven by strong demand for mechanical seals across oil & gas, power, nuclear, and marine sectors
- Growth led by exports, strategic capacity expansion, and rising penetration in global markets
- Management emphasized R&D investments, aftermarket opportunity (from FY27), and export diversification, while cautioning about margin pressures from project bids
- Exports: 62% of revenue; domestic: 38%
- Export mix: Europe (42%), Russia (17%), USA (16%), RoW (19%), South America (3%), Middle East (4%)
- Current business largely new seals; replacement/spares (higher-margin) to form 10–15% of sales from FY27
- Growth Drivers:
- Order intake: +25% YoY, supported by new client approvals (e.g., ADNOC, Feb 2024 – 125 pumps supplied by May 2025)
- Key verticals: API 682 oil & gas, nuclear, marine, and power sectors
- Targeting 15% share in new API-compliant pumps across refineries, petrochemical, and power industries
- Geographic Expansion:
- Middle East: UAE JV (SealTech LLC): Service center by Jul 2025; addressing USD 60 Mn market (clients: ADNOC, KSB, Sulzer). Plans to replicate model in Oman, Kuwait, and Qatar
- Russia: Direct supply traction post exhibitions
- USA / Europe: OEM & end-user focus; participation in Pump Symposia (Houston) and WEFTEC 2025 (Chicago)
- Operations & Capacity:
- New Kaman facility expanded capacity by ~65%, aimed at product diversification rather than volume alone.
- Full operational alignment (equipment + manpower) by Dec 2025; utilization capped at ~80% due to project-based business.
- Working capital heavy: Inventory Rs 50 Cr, Debtors Rs 25 Cr; expected to normalize post Rs 200 Cr revenue mark.
- No major supply-chain disruptions despite geopolitical headwinds
- Guidance & Outlook:
- FY26 Revenue Growth: 15–20% YoY, led by strong order book, new approvals, and Middle East/India project pipeline.
- Long-Term Target: Rs 225 Cr revenue by FY28–29
- Margins: FY25 EBITDA (~24%) to be sustained; near-term pressure expected from low-margin entry bids, offset later by replacement business (FY27 onward)
- Replacement / Aftermarket: 10–15% of sales from FY27, recurring and high-margin once client plants stabilize
- Capex / Funding: No immediate capex; considering preferential issue for overseas service centers. Adequate cash; modular expansion possible in 6–8 months
Hope you found the blog post useful and it added value to your investment decisions. Sign up for more interesting stock ideas and industry notes.
Disclaimer: This is not a recommendation to buy/sell any of the stocks mentioned above. The securities quoted are for illustration only and are not recommendatory.
Ekansh Mittal
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