Brief of the Company:
(i) Mohindra Fasteners Limited (MFL) is a manufacturer of ‘High Tensile Fasteners’ used in Automotive, and Engineering sectors. Fasteners might not be visible, but they are the components that join everything else. The below picture will give you an idea of the product.
(ii) The company started commercial production in 1997 and currently has an employee base of ‘400’.
(iii) It is listed on the Metropolitan Stock Exchange (MSEI).
(iv) The company derives nearly 40% of revenues from Domestic sales and the rest 60% from export sales from North America, the UK, and Europe.
(v) It supplies directly to Hero MotoCorp Limited, the largest 2-wheeler manufacturer in the world. It also supplies components to Tier-1 suppliers of Maruti Suzuki, Hyundai India, and Tata Motors.
(vi) The business is extensively dependent on ‘Steel’ as it is the major raw material for fasteners. With ‘Steel’ prices declining, in recent times, the company should benefit from this macro factor.
(i) Plant I – 60th K. M. Stone, Delhi – Rohtak Road, Haryana.
(ii) Plant II – 60th K. M. Stone, Delhi – Rohtak Road, Haryana.
(iii) Plant IV – 70th K. M. Stone, Delhi – Rohtak Road, Haryana
Fasterner Industry and Market Size:
(i) The Indian automotive sector is expected to be the largest consumer of industrial fasteners; it is followed by the construction and the engineering sector.
(ii) The global industrial fasteners market is expected to reach a value of INR ~7.77 lakh cr by 2023, expanding at a CAGR of 6.5% from 2018 (Source: ResearchAndMarkets.com).
(iii) Rising demand for fasteners in the automotive industry, coupled with an increase in construction and manufacturing spending in emerging countries like China, Brazil, Saudi Arabia, Australia, Indonesia, and India, is expected to drive the demand for industrial fasteners during the forecast period.
FY18-19 Financial Performance Snapshot:
(i) Revenue from operations increased by 18.33% to Rs. 134,83.37 Lakhs.
(ii) Export Sales increased by 31.92% to Rs. 8350.40 Lakhs.
(iii) EBIDT increased by 26.15% to Rs. 1726.01 Lakhs.
(iv) Profit before tax increased by 32.17% to Rs. 1203.36 Lakhs.
(v) Net Profit increased by 50.95% to Rs. 910.39 Lakhs.
Road Ahead in FY19-20
In FY19-20, the volumes of the 2W Industry, the Passenger Car sector and the Heavy sector(Commercial) are substantially down since the beginning of April 2019 and are going down on month on month basis. There are too many variables that include a possibility of a healthy monsoon, successful festival period, adaptability to BS-VI norms, government’s push for eco-friendly vehicles and the rising cost of ownership of the vehicles. All these factors are currently detrimental and the volumes shall increase if only if all the variables are in the positive zone.
Exports have always remained the backbone of the company and the results have been encouraging. The Exports besides adding to the top line of the company also contribute towards better profits and foreign exchange earnings for the company and the country. The export orders in hand, as of date, are enough to cover our production and sales for the next 2 to 3 months. This is down since the last years. The order inflow is a running continuous process and the international markets are currently operating at lower levels than before. The orders are flowing but not at the speed at which they were coming in the past. US-China trade tensions, coupled with Brexit uncertainties and economical cyclical patterns are affecting international trade currently.
The company’s continued investments towards the development and manufacture of new products are expected to result in further improvement in performance in the years ahead despite a slow down as focus is more on adding specials and value-added parts.
So we can conclude that the FY19-20 would be a challenging year for the company.
Key takeaways from FY20-21 Annual Reports
1. Total revenue from the operations of MFL for the year ended March 31, 2021 was at Rs. 108 Crores as against Rs. 104 Crores in the previous year.
2. Despite a sharp fall in revenues in the first quarter, Mohindra Fasteners has earned a higher net profit of Rs. 10.38 Crores for the year 2021 as compared to corresponding figure in the previous year was Rs. 9.36 Crores for the year 2020.
3. Mohindra fasteners export sales for the year ended March 31, 2021 was at Rs. 74 Cores as against Rs. 64 Crores in the previous year 2020. However, the domestic sales remains at par in FY20-21 as compared to last year.
4. Mohindra Fasterners has clocked an EBITDA of ~17 Crores against ~16 Crores last year.
5. The Earnings per share(EPS) for the year ended March 31, 2021 was higher at Rs. 19.38 compared to Rs. 17.49 in the previous year.
6. Mohindra Fasteners green field project at IMT Rohtak, Haryana, has been progressing well despite the pandemic. The construction activities are likely to be completed by December 2021/January 2022.
7. The Board of Directors have recommended a total dividend of ₹5 per share for the financial year 2020-21.
|Total Available Shares:||100|
|Face Value:||₹ 10 Per Equity Share|
|Lot Size:||50 Shares|
|Current Unlisted Share Price:||₹ Best In Industry Per Equity Share|
|Year||Long-term debt||Short-term debt||Net-Worth||D/E||ROE||Free-cash Flow||Receivable days|
|Year||Dividend per share|
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