HLE Glascoat - Under performer may show trend reversalHello, Everyone I hope you all will be doing well in your life and investing. Here I have brought a stock that is mostly at the bottom. HLE Glascoat Ltd is the name of the stock. CMP is 402.80. 350 looks like strong support. 430 is 200 DMA. Trend reversal Only if it close above that. It may turn positive for the long term.
If it close above 520 we may see long term target as per fibbo 620, 790, 920, 1050 to 1250. Not strong conviction but chances of bottom out.
HLE Glascoat Ltd
Source: screener.in
About
HLE Glascoat Ltd is in the business of manufacturing and sales of glass lined equipment and filters and dryers equipment for various industries in the country.
Key Points
Business Segments Q3FY24
Filtration and Drying Division (~39%)
The company manufactures filtration and drying equipment for various industries. It is a market leader with greater than 50% market share.
Glass Lined Equipment Division (~49%)
The company is the 2nd largest domestic player, with a 25% market share in glass-lined equipment manufacturing and sales.
Heat Exchange Equipment (12%)
The Company completed the acquisition of 35.56% of the partnership share in Kinam Engineering Industries on 26th September 2023. Kinam specializes in the manufacturing of shell and tube and corrugated heat exchangers of up to 4,000m2.
Industry-Wise Revenue Breakup Q2FY24
Specialty Chemicals- 42%
API & Pharma- 39%
Agrochemicals- 9%
Others- 10%.
Manufacturing Facilities
The company owns 7 manufacturing facilities globally. and possesses the capacity of producing ~600+ filters & 2,000+ GL Equipment p.a.
Capex
Completed Greenfield Plant at Silvassa, and began commercial manufacturing in Q1FY23.
In FY23, the Co. acquired a land area spanning ~1.30 Lakh square meters near Anand, Gujarat to establish a manufacturing plant dedicated to glass-lined equipment.
Key Clientele
Clients include Bayer, UPL, Sun Pharma, Atul, Gsk, BASF, Pi Industries, SRF, Zydus, Dr. Reddys, Sanofi, and others. Top 10 customers of the company account for ~35% of the total revenue in the glass-lined equipment segment and around 44% of the total revenue in the filtration and drying equipment segment in FY23.
Order Book Position
The company has an order book position of Rs 550 Cr as of Q3FY24 which provides visibility of 5 months for the India business and 12 months for the Thaletec business.
Discontinuation of Chemical Business
In May 2020, the company announced wind-down of its chemical manufacturing situated in Maroli due to its presence near upcoming residential establishments. The division accounted for ~20% of revenues in FY20.
Amalgamation
The company in Aug 23 proposed the acquisition of a 70% stake in Kinam Engineering Industries engaged in the manufacturing of heat exchangers. In Q2 FY24 it acquired a 35.56% stake in Kinam Engineering for ~Rs. 80 Cr and acquired a 0.50% equity shareholding in Kinam Enterprise.
The Board in Feb 24 has approved the Scheme of Amalgamation of Kinam Enterprise Private Limited with HLE Glascoat. Consequent to the Scheme the Company will acquire the control over the balance of 34.44% shares (to make it a 70% controlling stake) in Kinam Engineering Industries Private Limited.
Focus
Its focus will be on growing its market share in the Filtration, Drying, and Glass-Lined Equipment segments in India and abroad.
This is just to boost my confidence. No Suggestions for buying.
Disclosure: I am not SEBI registered. The information provided here is for educational purposes only. I will not be responsible for any of your profit/loss with these suggestions. Consult your financial advisor before making any decisions.
