Rishabh Instruments Business analysis
Contents
Business
Industry overview
Operating metrics
Financials
Points to consider
Valuation
Business
Rishabh Instruments, started in 1982, by Narendra Joharimal Goliya ( promoter, chairman & MD) is an tech driven engineering company based out of India and involved in supply of wide range of electrical measurement, process optimization equipment and aluminium high pressure die castings catering to a variety of industries. All products focus on energy efficiency solutions.Rishabh is a global leader in manufacturing and supply of analog panel meters and is among the leading global companies in terms of manufacturing and supply low voltage current transformers. Subsidiary Lumel is one of the leading non-ferrous pressure casting players in Europe.
Rishabh Instruments has total of 145 product line catering to over 3000 customers globally, global leader in manufacturing and supply of Analog panel meters, and manufacturing and supply of Low voltage current transformer.
Rishabh Instruments has 5 manufacturing facilities (2 in Nashik), rest in Poland and China. 99% of production is in-house.
Products
Rishabh operates in these product segments
1. Electrical automation products
2. metering, control and protection devices
3. portable test and measurement equipment
4. high pressure die casting solutions (HPDC)
5. Solar string inverters
Some of the electrical automation products are
1. Energy management software
2. Transducers and isolators
3. Paperless recorders (chartless) and dataloggers
4. Temperature and humidity recorders
5. I/O convertersSome metering, control and protection devices consist of
1. Analog panel meters
2. Rotary cam switches
3. current transformers
4. shunts
5. digital panel meters
6. multifunction meters
7. multi-load monitoring meters
8. power quality meters
Some portable test and measurement equipment are digital multimeter, digital clamp meter, digital insulation tester etc.
Rishabh offers complete aluminium high pressure die casting solutions for customers requiring close tolerance fabrication, machining and finishing of precision components. This business is based out of Poland and is one of the leading non-ferrous pressure casting players in Europe.
Industry overviewElectrical automation components are used to monitor, analyze, and take control of real-time field equipment such as motors, pumps, and other manufacturing equipment. Digitization is transforming all industries, and electrical automation plays an important role in that.
Global industry is dominated by Siemens, ABB, Emerson, Schneider electric, Honeywell. Indian market is dominated by these 5 players, constituting 50% of the market.
Electrical Automation
The global electrical automation market was valued at Rs 12 lakh crore in 2022 and is expected to grow at CAGR of 7.8% . India is forecasted to grow the fastest, driven by industrial users like automotive, oil & gas, steel industries.
Metering control devices
The global metering, control and protection devices market is estimated at USD 2,78,000 crore in 2022 , to grow at CAGR of 4.8%. Global slowdown has affected this industry which is expected to pick up soon.
Portable test and measurement equipment
Portable test and measurement equipment play a central role in enabling digital transformation, IoT, advanced electronic devices .Estimated total global industry size is Rs 42000 crore in 2022, expected to grow at 5.1%
Solar string inverters
Global market for solar string inverters is Rs 35000cr in 2022 , to grow at CAGR of 9.1%. Commercial and residential rooftop solar installations are drivers of growth.
Aluminium high pressure die casting solutions
Aluminium high pressure die castings market is 6,90,000 crore, estimated to grow at 6.1% CAGR.
Acquired company of aluminium die casting of Poland ( Lumel) and India contributes 38% of business. Revenues are diversified across different countries.
Client concentration is not too high, top 10 customers contribute 32% of revenues.
Segment wise revenues
Balance sheet
Trade receivables 121 cr, not that high.
Cash equivalents is 66cr
Total borrowings 103 cr
Debt equity ratio 0.26 ( most peers operate at similar or higher debt)
Cashflow from operations (CFO) /PAT average 66% for last 3 years.
Points to consider
73% of the business coming from exports , 17% from India, so global scenario , especially Poland and US, are important to consider. Poland business subject to high natural gas prices of Europe.
Rishabh Instruments have acquired other companies since 2012 and look forward to inorganic acquisition route in future for growth.
Despite Europe and US being in slowdown, has grown at healthy 20% CAGR. Margins are comparable to bigger peers ( though not exactly comparable).
67% of revenues come from 8 international subsidiaries. So looking deeper into the subsidiaries become important.
IPO funds will be utilized for Nashik plant I expansion, which is running at 65% capacity utilization ( except for current transformers which is a major product at 94%)
Electronic devices have a dependence of semiconductors. Global semiconductor shortage will affect the electronic parts business.
Valuation
Rishabh Instruments is valued at P/E of 34. No similar comparable listed peer available.
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Operating metrics
Geographical presence
Aluminium casting and metering devices are main businesses of the company.
Financials
Annual revenues of Rishabh Instruments is 580cr. PAT 57cr.
Revenue from operations increased at CAGR of 20%, PAT increased at CAGR of 16% from FY 21 to FY 23.
EBITDA margins 16.6%. ( peers Siemens, ABB at 14%, Schneider at 19%)
PAT margins 8.6% ( Siemens, ABB at 9-10%, Schneider at 5.5%)
ROCE at healthy 13.8%, debt/ equity ratio 0.26
