💰 Financial Performance

Revenue Growth by Segment

Revenue growth has been negative across segments, with a 3-year CAGR of -10% and a TTM decline of -6%. The company supplies fasteners to replacement and original equipment (OEM) segments.

Geographic Revenue Split

Not disclosed in available documents, though the company is headquartered in Rohtak, Haryana.

Profitability Margins

Profitability is severely stressed with a Return on Equity (ROE) of -90.6% for the last year and -37.6% over the last 3 years. Operating Profit Margin (OPM) was -3% in Dec 2016.

EBITDA Margin

Operating Profit was -INR 2 Cr on sales of INR 61 Cr in Dec 2016, resulting in a negative EBITDA margin of approximately -3.2%.

Capital Expenditure

Fixed Assets stood at INR 84 Cr as of March 2015. The company capitalized INR 49,95,884 (INR 0.50 Cr) for dies and tools during FY 2016-17 without physical verification.

Credit Rating & Borrowing

Borrowings reached INR 266 Cr as of March 2015, up from INR 62 Cr in 2006. The company has a low interest coverage ratio, indicating high financial risk.

⚙️ Operational Drivers

Raw Materials

High tensile steel (implied by the manufacture of High Tensile Fasteners) and commodities for Torx Drive Systems.

Raw Material Costs

Not disclosed as a specific percentage of revenue, but the company identifies commodity price increases as a significant financial risk concern.

Manufacturing Efficiency

Manufacturing efficiency is low, evidenced by a Return on Capital Employed (ROCE) of only 0.28%.

📈 Strategic Growth

Expected Growth Rate

Not disclosed in available documents

Growth Strategy

The company focuses on its product range of 9000 variants and Torx Drive Systems. It has changed its R&D accounting policy to amortize expenses at 20% per annum over 5 years to better reflect future economic benefits.

Products & Services

High Tensile Fasteners, Torx Drive Systems, and customized products for automotive and industrial OEMs.

Brand Portfolio

LPS (Lakshmi Precision Screws).

New Products/Services

Torx Drive Systems are highlighted as a key specialized product area for automotive and industrial segments.

🌍 External Factors

Industry Trends

The auto component industry is shifting toward specialized fasteners like Torx Drive Systems, but the company is currently struggling with a 10-year stock price CAGR of -21%.

Competitive Landscape

Faces competition in the high tensile fastener market from both domestic and international suppliers.

Competitive Moat

The company has a long history (incorporated 1968) and a wide product range (9000 variants), but these have not translated into sustainable financial performance.

Macro Economic Sensitivity

Highly sensitive to automotive industry demand and interest rate fluctuations due to high leverage.

Consumer Behavior

Demand is driven by automotive OEM production cycles and the industrial replacement market.

⚖️ Regulatory & Governance

Industry Regulations

The company is in violation of Section 73 of the Companies Act, 2013, regarding customer advances of INR 2,21,50,242 (INR 2.22 Cr) held for more than 365 days, which are treated as deposits.

Taxation Policy Impact

The company had a 0% tax rate in Mar 2015 due to losses; historically, it has ranged up to 46%.

Legal Contingencies

A fraud of INR 1,60,59,342 (INR 1.61 Cr) by an ex-employee is under litigation in the Delhi High Court. Contingent liabilities stand at INR 9.77 Cr.

⚠️ Risk Analysis

Key Uncertainties

Auditors issued a qualified opinion because they were unable to physically verify inventories of finished and semi-finished goods as of March 31, 2017.

Geographic Concentration Risk

Operations are concentrated in Rohtak, Haryana.

Technology Obsolescence Risk

The company is attempting to mitigate technology risks through R&D in Torx Drive Systems.

Credit & Counterparty Risk

The company needs to recognize a provision for doubtful debts of approximately INR 1.41 Cr related to the unrecovered portion of the 2005-06 fraud.