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Shivalik Bimetal
Our verdict on Shivalik Bimetal isn’t the consensus take — see where we landed, and the one risk the bull case glosses over.
See the verdict — free →Does management do what it says?
Management expects both thermostatic bimetals and shunts to come under mandatory BIS certification within the current year. — target: BIS Implementation
“And so we are expecting that within this year, we should be seeing both of these categories also come under BIS”
The company is expanding its global presence through the establishment of a wholly owned subsidiary in Italy.
“As part of our growth strategy, we look forward to expanding our Global presence, and are pleased to share the addition of ‘Shivalik Bimetals Europe SRL’ in Italy, established during FY25 as our wholly owned subsidiary (WOS).”
Management expects EBITDA margin to improve further for a few more quarters before plateauing. (+3 more commitments)
“We expect that before this margin expansion plateaus, we will continue to see, for a few more quarters, this percentage improving further because as we speak these things are being converted.”
Management expects momentum to stabilize and inventories to return to appropriate levels through the second half of the year. (+1 more commitment)
“As these customers rebalance and resume normal ordering, we expect our momentum to stabilise and inventories to return to more appropriate levels through the second half of the year.”
The company is establishing a new dedicated R&D 'Center of Excellence' in the NCR region to accelerate new product development. — target: Establishment of R&D Center (+1 more commitment)
“So these usually can take anything between 12 to 18 months, if you're being optimistic, and that's when it then gets released for commercial production.”
See the full cited Management analysis of Shivalik Bimetal
How durable is the business?
While revenue grew marginally by 0.12%, the segment's share of total revenue has shifted from 44.21% in FY25 to 50% in Q3 FY26, though volumes declined by 9.71% in the quarter. (1 shifted, 1 expanding, 1 stable)
“Bimetal segment recorded a marginal growth of 0.12%, increasing to ₹55.12 crore... Bimetal segment witnessing a sharper decline of 9.71% [in volume].”
Domestic revenue share is expected to stabilize or grow slightly to 44-47%, supported by the upcoming mandatory BIS standards which favor local quality players. (1 stable)
“domestic market would be in the range of 44 to 47 okay... we are expecting that within this year, we should be seeing both of these categories also come under BIS”
The company maintains a strong net-cash position and has significantly improved its working capital efficiency by reducing inventory and net working capital days. (1 stable, 1 expanding, 1 contracting)
“Working-capital efficiency improved with inventory days down 20 to 177 and net working-capital days down 29 to 212. ... we carry net cash of ₹77 crore”
Export share remains dominant at 55-58%, with significant improvement noted in European and Asian markets during Q4 due to new customer onboarding. (2 expanding, 2 contracting, 1 shifted)
“Export 56% [FY 2025 Domestic & Export Sales Mix]”
The company is shifting its procurement model to favor domestic suppliers to de-risk from global quality volatility and exploring backward integration. (1 shifted)
“Our raw materials- our pricing structure is such that all of the raw material pricing is passed through because you know it can go either ways.”
See the full cited Business Model analysis of Shivalik Bimetal
Where does growth come from?
Working capital days have increased significantly to 250-260 days, which could strain cash flow if not managed. The company is trying to fix this by finding local suppliers and using new payment agreements.
“I had a look on the our net working capital days which have grown as almost from 250- 260 days... 250- 260 net working capital days is like too high.”
Traction in the Indian EV market is accelerating, particularly in the two-wheeler segment. Management identifies India as the biggest growth market for automotive shunts, offsetting weakness in Western markets. (1 accelerating across 1 signal)
“What we are now seeing, interestingly, is that our biggest growth market for automotive shunts – whether it’s EVs or hybrids – specifically for two-wheeler EVs, is coming from India.”
Traction in the automotive/EV segment is accelerating with 37% of total revenue now coming from this sector. Management reports a higher number of inquiries and positive sentiment from North American and Indian EV customers. (2 accelerating across 2 signals)
“currently, we are doing almost 37% automotive business out of total revenue... we are seeing higher, higher number of inquiries and opportunities for the automotive EV opportunities”
Expansion is actively underway with Rs. 20 crore allocated to the SEPPL subsidiary for the contact business. The project is in the final stages of automation and land acquisition, with capitalization expected by December 2025. (3 steady, 1 new trend across 4 signals)
“out of ₹32 crore almost ₹20 crore pertains to SEPPL, which is underway for capitalisation... This capex will be capitalized by the end of December, which is why it is currently under CWIP.”
Margins are showing strong acceleration in the most recent quarter (Q4 FY25) reaching 23.17%, up over 400 basis points. Management maintains a steady full-year outlook of 22-23% but sees potential for further improvement as product mix shifts toward assemblies. (5 accelerating across 5 signals)
“During the fourth quarter, we delivered a 25% year on year growth in EBITDA, with margins expanding by over 400 basis point to 23.17%... closing with an EBITDA margin of 22.28%”
See the full cited Future Growth analysis of Shivalik Bimetal
What could break the thesis?
Margins have significantly improved, with EBITDA margins expanding by 400 basis points to 23.17% in Q4, driven by cost control and steady gross profit delivery. (3 easing)
“Margins affected by product mix & fluctuations in raw materials”
The risk is easing as business with Vishay has restarted with new component designs for global EV manufacturers. Management expects Vishay business value to return to peak levels seen 2-3 years ago by FY27. (1 easing)
“Dual-process fortress (EBW + Diffusion Bonding) driven by strong R&D teams, impossible to replicate quickly; customer re-qualification 24 months.”
Management clarifies that only 3-4% of total revenue is currently impacted by tariffs and they do not foresee a major long-term hit due to the lengthy customer validation process which creates stickiness. (1 easing)
“In our business line , you see, there's no impact on that. If even you can go through the investor deck, you can see only three to 4% of the total revenue somewhere is having an impact... tariff does not have a major or significant impact on our product lines.”
This risk has significantly eased. Gross margins improved by 296 basis points due to a shift toward high-value components. Management clarifies that raw material costs are a 'complete pass-through' and do not hurt margins. (1 easing)
“Raw material pricing does not really have a very strong effect on our margins, mainly because there is a complete pass-through of costs... although you will see a lower growth in the top line, you will continue to see an improvement in the bottom line.”
The domestic bimetal market remains flat, tied to the slow-growing switchgear/MCB market. Management is pivoting to R&D for new applications of their bonding processes to break the reliance on general market growth. (1 stable)
“the general switch gear market has also had this sort of a flat kind of a performance... the best way to grow in that area what we are working on is we are looking at you know certain other applications.”
See the full cited Risk analysis of Shivalik Bimetal
Shivalik Bimetal analysis by filing period
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