Hello Sir,
Hope you are doing well.
Jan’25 has been tough for investors with broader markets down around 20%. While correction was expected; however, the pace of correction has been very fast.
In general, small-mid cap indices correct 20-35% every 2-3 years. We are already down 18-20% from peak, so unless something break down badly, one could prepare oneself mentally for another 10-20% correction and start hunting for opportunities because some stocks are coming back in value range.
Below, we have shared notes on Bharat Wire Ropes from its presentation and credit rating report.
It is one of the largest manufacturer of Steel Wire Ropes in India. The stock is down 50% + from peak of 400 and promoters recently increased stake around 220-230 odd levels.
Before that: On 18th Jan’25, we released a new stock recommendation under “Insider Bets“ subscription which is again based on Promoters’ actions.
Promoter is basically infusing capital and increasing stake when the stock is down 60% from peak. You can check the details HERE
Bharat Wire Ropes (BWRL) – Notes from Presentation and Credit rating report
- BWRL is a manufacturer of metal wire ropes (used in lifting equipment such as cranes, elevators, among others), wire rope assemblies and defense products
- The company was earlier managed by the Shah Family, and later in 2010, it was acquired by Mr. M L Mittal, current promoter and managing director
- BWRL has two manufacturing plants at Atgaon (capacity of 6,000 MTA) and Chalisgaon (capacity of 66,000 MTA)
- Company is listed as a supplier with government and semi-government organisations namely Indian Railways, Shipping Corporations of India, ONGC, Coal India Limited, BHEL, major Port trusts, and electricity boards, among others
- BWRL also exports to over 55+ Countries including Australia, Middle East, Nepal, New Zealand, UK, US, Singapore, South Africa, Vietnam and many more
- Exports accounted for 77% of the sales in FY 24 and Domestic 23%
- BWRL’s scale of operations grew by 5% on a y-o-y basis from Rs 589.06 crore in FY23 to Rs 621.84 crore in FY24 supported by growth in volumes by 6% on a y-o-y basis
- The realization per ton was flat, despite declining input costs, as the company continues to offer its product at a premium considering increased acceptability in the international market
- BWRL’s operations are working capital intensive in nature due to the requirement of holding sizeable inventory and extending credit to its customers. The company maintains an average inventory of 80-90 days and extends a credit period of 30-90 days to its customers
- With largely order-backed procurement and customers nature of products, the company is able to pass on most input cost volatility to its customers, however with a lag
- Government has extended PSI subsidy scheme (refund of SGST) till October 2025, which was expected to expire in October 2023
- The company received subsidy worth Rs 40 crore in FY24 and Rs 14 crore in the current year, 50% of which, has been utilized towards prepayments of the term loans (per resolution plan)
- As of March 31, 2024, the company had a total PSI subsidy receivable of around ₹95 crore
(End)
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.
Best Regards,
Ekansh Mittal
Research Analyst
Web: https://www.katalystwealth.
SEBI Research Analyst Registration No. INH100001690
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Name: Ekansh Mittal Email Id: [email protected] Ph: +91 727 5050062
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