Pumps, Valves, and Others (3 segmental business)
In March 2020 quarter Pumps business accounted for 79% of the business.
The pumps segment includes manufacturing/trading of all types of pumps like industrial pumps, submersible pumps, effluent treatment pumps, etc. and spares and services in respect thereof.
In March 2020 quarter Valves business accounted for 14.7% of the business. The valves segment consists basically of manufacturing and trading of industrial valves and spares and services in respect thereof.
In March 2020 quarter other businesses accounted for 6.3% of the business. Represents the manufacture of castings.
Industrial uses of its Products:
- Water Segment, Waste Water, Process Industry, Energy(Nuclear Power stations), Construction, Oil and Gas, etc.
Management and Shareholding:
- KSB Group was founded in Germany in 1871 and is a leading supplier of pumps, valves, and related systems.
- On 11th April 1960, the foresight of Mr. F. K. Heller and Mr. V. C. Setalvad gave birth to KSB Pumps Limited
- Canadian Kay Pump Limited, which holds 40.54%, is a wholly-owned subsidiary of KSB AG (KSB german group)
- Institutional holding is at 16.83% which includes Bajaj Alliance Life insurance(3.47%), Sundaram Mutual fund (2.72%), Vantage equity fund(1.26%), Pinebridge Investment Maurities ltd(2.74%) etc.
- Promoter including Industrial and Prudential Investment co Ltd (Mumbai based company with more than 90 years) whose Chairman and MD is Gaurav Swarup (not much info about him)
- Chairman and MD o Mr. Rajeev Jain was the Managing Director at KSB in Indonesia for over a decade and successfully steered the company to a leadership position in that region
Financials (FY ends in December)
- In FY19 revenue rose 18% while profit rose by 40% YoY.
- In the last 8 years (2012 to 2019) Revenue and profit have never reduced YoY although growth has been slow while eps rose from 17.37 to 28.9.
- Debt to equity is very low around 0.07 (Based on the Balance sheet as on 31 December 2019) also net debt-free.
- Net cash per share as on 31 Dec 2019 is 83rs or around 17% of Market cap.
- Pump Segment which contributes the most to its share in Total revenue has been more or less the same around 78% during the past 5 years. However, the profit margin has been reducing continuously since 2015 from 12.7% to 10.4% in 2018 however showed a revival in 2019 and rose to 11.5%
- Net Asset Turnover ratio for the Pump segment which was reduced from 2.9 to 2.1 from 2016 to 2.1 in 2018 showed a swift revival and touched a high of 2.6.
- Combining the above two points 2019 seems a revival for the pump segment as Pump segment revenue rose by as high as 18.8%YoY breaking the increasing trend of 13.2%, 9.8%, 8.9% respectively for 2018, 2017 & 2016 YoY with profit margin reviving and Net asset Turnover also joining the race seems very attractive.
- PPE life is around 6.7 years which can be considered a good number.
- Of the total sales for 2018 exports accounted for around 14% thus much of its dependence on domestic push.
- Company has been launching new products in spite of the COVID19 situation seems they are optimistic of demand
- Debtor and inventory days remain elevated around 89 days and 83 days respectively 43% of total assets account for Debtor and Inventory.
- The depreciation rate seems to elevate from 11.8% in 2017, 12.7% in 2018 & 14.6% in 2019 needs clarification from management for the reason of the same.
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