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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?
The company has successfully expanded its EBITDA margins beyond the 22-23% range, reaching 23% in the current quarter with an aspirational target to improve it by another 200 basis points over three years. (4 exceeded across 4 tracked commitments)
“Yes. As we mentioned last time, Q4 seems to be the time where we will start seeing some revenue generation from the PCBA assemblies, and we see that this has the potential to give us, at least in the near term – that is, next financial year – a topline of about ₹50–70 crore.”
Management has increased its focus on automation due to rising manpower costs, leading to higher than originally planned capex. Current CWIP stands at ₹32 crore. (1 exceeded across 1 tracked commitment)
“regarding the continuous maintenance capex and the automation capex, which is in the range of 10 to 15 crore year on year.”
See the full cited Management analysis of Shivalik Bimetal
How durable is the business?
Margins expanded significantly due to a better product mix (more components/assemblies vs. raw parts) and operating leverage, despite macro headwinds. (2 expanding)
“EBITDA grew 32.5% with a 452 bps margin expansion to 25.26%, driven by mix, cost discipline and operating leverage.”
The shunt segment is expanding, led by 30% growth in the Indian market driven by smart metering and e-mobility. Management expects 15-18% growth for FY26. (2 expanding)
“shunt resistor segment saw good traction India as the Indian market. It led with over 30% growth. This was supported by demand from mainly smart metering, e mobility”
See the full cited Business Model analysis of Shivalik Bimetal
Where does growth come from?
Shivalik is setting up a new manufacturing facility in Pune to be closer to major automotive customers. This plant will focus on bus bars and assembly business for the EV sector.
“our board has just approved our plans to set up a new facility in Pune for the automotive bus bars and connectors and subsequent assembly business... The 200 million rupee capex funding for this project will be managed through our internal approvals.”
Domestic shunt growth is accelerating due to the 'Make in India' push for latching relays in smart meters, with revenue nearly doubling from the previous year. (1 accelerating, 1 new trend across 2 signals, 1 leading indicator)
“we are looking at um you know there are certain types of automotive fuses that we are working on... There's a we looking at certain automotive inductors that you know we're still assessing”
See the full cited Future Growth analysis of Shivalik Bimetal
What could break the thesis?
The risk is intensifying as management confirms that the 50% tariff is now active after exemptions were withdrawn. However, they are seeing a 'blessing in disguise' as customers are accelerating the shift to buying finished assemblies directly in Asia to bypass US tariffs entirely. (1 intensifying, 1 stable, 1 easing, 1 high-severity)
“Quarter 3 in general has been challenging for us with unpredictability related to geopolitical factors especially related to US tariffs. We generally experience reduced orders from our US based customers during that time.”
The risk is INTENSIFYING. Inventory days for H1 FY26 increased by 8 days to 199 days compared to H1 FY25. This indicates that goods are sitting in the warehouse longer before being sold. (2 intensifying, 2 easing, 1 stable, 1 high-severity)
“I had a look on the our net working capital days which have grown as almost from 250- 260 days. Just wanted to understand uh what measures are we taking on that. front, you know, to bring it to a more controllable kind of a number because uh 250- 260 net working capital days is like too high.”
See the full cited Risk analysis of Shivalik Bimetal
Read the full thesis on Shivalik Bimetal
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