Elantas Beck India Ltd:Annual Report 2023-24 Analysis

Elantas Beck India Ltd.: A Comprehensive Overview #

About the Company #

Year of Establishment and Founding History #

Elantas Beck India Ltd. was established in 1956 as Dr. Beck & Co. (India) Ltd. It was a joint venture between Dr. Beck & Co. GmbH, Germany, and an Indian partner. Dr. Beck & Co. GmbH, founded in 1897, is a pioneer in electrical insulation materials.

Headquarters Location and Global Presence #

The company’s headquarters are located in Pune, India. Elantas Beck India is part of the Elantas GmbH group, a global leader in specialty chemicals and insulation materials with a presence in numerous countries worldwide. Elantas GmbH is owned by ALTANA AG, a specialty chemicals group.

Company Vision and Mission #

While publicly stated explicit vision and mission statements can be difficult to definitively confirm, the company’s operations and communication suggest a focus on:

• Vision: To be a leading provider of high-quality specialty chemicals and insulation materials, recognized for innovation, reliability, and sustainable solutions.
• Mission: To deliver customized solutions to meet the evolving needs of their customers, driven by technological expertise and a commitment to environmental responsibility.

Key Milestones in Their Growth Journey #

• 1956: Establishment of Dr. Beck & Co. (India) Ltd.
• Significant Growth: Over the decades, the company expanded its product portfolio and manufacturing capabilities to become a prominent player in the Indian market.
• Acquisition/Integration: Integration into the larger Elantas GmbH group, leveraging global expertise and resources.
• Expansion: Continuous expansion of manufacturing capacity and R&D capabilities.

Stock Exchange Listing Details and Market Capitalization #

Elantas Beck India Ltd. is listed on the Bombay Stock Exchange (BSE) under the ticker symbol 500123. Current market capitalization can be found on financial websites like the BSE, NSE, and other financial portals.

Recent Financial Performance Highlights #

Recent financial performance data can be obtained from the company’s annual reports, quarterly results, and financial news outlets. Focus on key metrics such as:

• Revenue growth
• Profitability (EBITDA, Net Profit)
• Earnings per share (EPS)

Management Team and Leadership Structure #

Details on the current management team and leadership structure can usually be found on the company’s website or in their annual reports. Typically includes the names and roles of:

• Managing Director/CEO
• Chief Financial Officer (CFO)
• Heads of key business units (e.g., Sales, Marketing, Operations, R&D)

Notable Awards or Recognitions #

Information about recent awards or recognitions can usually be found on the company’s website or in press releases.

Their Products #

Complete Product Portfolio with Categories #

Elantas Beck India offers a comprehensive range of specialty chemicals and insulation materials, categorized as follows:

• Wire Enamels: Used for coating electrical wires in motors, transformers, and other electrical equipment.
• Casting and Impregnating Resins: Used for encapsulating and insulating electrical components.
• Electrical Insulating Varnishes: Used to provide insulation and protection to electrical equipment.
• Specialty Resins: Including resins for composite materials, adhesives, and other applications.
• Electronic Materials: Products for electronics applications, such as conformal coatings and potting compounds.

Flagship or Signature Product Lines #

Wire Enamels and Casting & Impregnating Resins are typically considered their flagship product lines, being core to their electrical insulation business.

Key Technological Innovations or Patents #

Details about specific patents are not easily publicly accessible without dedicated patent searches. Elantas is known for continuous innovation in developing:

• High-performance wire enamels with improved thermal properties
• Eco-friendly and sustainable resin formulations
• Advanced curing technologies for faster processing

Manufacturing Facilities and Production Capacity #

Elantas Beck India has a manufacturing facility in Pune, India. Details on specific production capacity are generally not publicly disclosed for competitive reasons.

Quality Certifications and Standards #

The company likely holds certifications such as:

• ISO 9001 (Quality Management)
• ISO 14001 (Environmental Management)
• IATF 16949 (Automotive Quality Management, if applicable)

Unique Selling Propositions or Technological Advantages #

• Extensive Product Range: Offers a broad portfolio of insulation materials.
• Customized Solutions: Ability to tailor products to specific customer requirements.
• Technical Expertise: Strong technical support and application know-how.
• Global Network: Leveraging the resources and expertise of the global Elantas group.

Recent Product Launches or R&D Initiatives #

Information about recent product launches and R&D initiatives can be found on their website or in press releases. Look for announcements related to:

• New resin formulations with improved performance
• Sustainable and eco-friendly product alternatives
• Solutions for emerging applications in electric vehicles and renewable energy.

Primary Customers #

Target Industries and Sectors #

• Electrical: Electric motor manufacturers, transformer manufacturers, cable manufacturers
• Electronics: Electronic component manufacturers, printed circuit board (PCB) manufacturers
• Automotive: Automotive component suppliers
• Industrial: General industrial equipment manufacturers
• Renewable Energy: Wind turbine and solar panel manufacturers.

Geographic Markets (Domestic vs. International) #

The company primarily focuses on the Indian domestic market, but also exports to other countries in the region and globally through the Elantas network.

Major Client Segments #

• Industrial equipment manufacturers
• Automotive component manufacturers
• Electrical motor manufacturers

Distribution Network and Sales Channels #

Elantas Beck India utilizes a combination of direct sales and a network of distributors to reach its customers.

Major Competitors #

Direct Competitors in India and Globally #

• Axalta Coating Systems (India)
• Covestro (India)
• Von Roll Holding AG
• Kyocera

Competitive Advantages and Disadvantages #

• Advantages: Established brand reputation, wide product portfolio, technical expertise, global network.
• Disadvantages: Potentially higher cost compared to some local competitors, reliance on imported raw materials.

How They Differentiate From Competitors #

Elantas Beck India differentiates itself through:

• Technical expertise and customer support
• High-quality products meeting international standards
• Customized solutions tailored to specific customer needs
• Focus on innovation and sustainability

Industry Challenges and Opportunities #

• Challenges: Fluctuating raw material prices, increasing competition, evolving regulatory landscape.
• Opportunities: Growing demand for electrical equipment and electronics, increasing adoption of electric vehicles, rising awareness of sustainable solutions.

Market Positioning Strategy #

Elantas Beck India positions itself as a premium supplier of high-quality specialty chemicals and insulation materials, focused on delivering customized solutions and technical expertise to its customers.

Future Outlook #

Expansion Plans or Growth Strategy #

Look for announcements related to:

• Expanding manufacturing capacity to meet growing demand
• Investing in R&D to develop new products and technologies
• Strengthening its distribution network
• Entering new markets or applications

Upcoming Products or Innovations #

Focus on advancements in:

• Eco-friendly and sustainable resin formulations
• High-performance insulation materials for electric vehicles
• Solutions for emerging applications in renewable energy

Sustainability Initiatives or ESG Commitments #

Focus on:

• Reducing its environmental footprint
• Developing sustainable products and processes
• Promoting ethical and responsible business practices

Industry Trends Affecting Their Business #

Key trends include:

• Increasing demand for electric vehicles and renewable energy
• Growing focus on sustainability and environmental regulations
• Rapid technological advancements in the electronics industry
• Rising demand for customized solutions

Long-Term Vision and Strategic Goals #

The long-term vision likely centers on:

• Maintaining its position as a leading supplier of specialty chemicals and insulation materials
• Driving innovation and developing sustainable solutions
• Expanding its market share and profitability
• Contributing to the growth of the Indian economy

ELANTAS Beck India Ltd. - Financial Analysis Report (FY2024) #

Key Financial Metrics (Trend Analysis) #

Financial data primarily covers FY2024 and FY2023 as provided in the source documents.

Revenue from Operations #

Increased by 10.09% YoY to ₹74,851.31 Lakhs in FY24 from ₹67,989.00 Lakhs in FY23, driven by a 10.74% increase in sales quantity (32,491 MT vs 29,339 MT).

Profitability #

• Profit Before Tax (PBT) remained largely flat at ₹18,345.03 Lakhs in FY24 compared to ₹18,362.24 Lakhs in FY23 (-0.09%), indicating some margin pressure despite revenue growth.
• Profit After Tax (PAT, including OCI) grew marginally by 1.26% YoY to ₹13,908.91 Lakhs in FY24 from ₹13,735.77 Lakhs in FY23.

Shareholder Returns #

• Proposed Dividend per Share increased to ₹7.50 (75%) for FY24, up from ₹5.00 (50%) for FY23.
• Return on Equity (ROE) declined to 17.46% in FY24 from 20.64% in FY23 (-15.41%).
• Return on Capital Employed (ROCE) decreased to 22.68% in FY24 from 25.54% in FY23 (-11.2

Detailed Analysis #

Financial Position Analysis of ELANTAS Beck India Ltd. (FY24) #

Comparative Balance Sheet Analysis (FY23-FY24) #

Assets (INR Lakhs) #

Liabilities (INR Lakhs) #

Operating Performance Analysis (FY24 vs FY23) #

Revenue Analysis #

Overall Revenue #

Revenue from Operations grew by 10.09% to INR 74,851.31 Lakhs in FY24 from INR 67,989.00 Lakhs in FY23. Total Income increased by 9.41% to INR 80,318.98 Lakhs from INR 73,410.23 Lakhs.

Segment Revenue #

• Electrical Insulation: Revenue increased by 9.43% to INR 62,894.03 Lakhs (FY24) from INR 57,473.88 Lakhs (FY23). This segment constituted approximately 84% of FY24 sales revenue.
• Electronic & Engineering Materials: Revenue grew by 13.11% to INR 12,184.95 Lakhs (FY24) from INR 10,772.69 Lakhs (FY23). This segment accounted for approximately 16% of FY24 sales revenue.

Geographical Revenue #

• India: Revenue increased by 10.09% to INR 74,162.22 Lakhs (FY24) from INR 67,360.22 Lakhs (FY23).
• Outside India (Exports): Revenue grew by 9.59% to INR 689.09 Lakhs (FY24) from INR 628.78 Lakhs (FY23). Exports constituted approximately 0.92% of Revenue from Operations in FY24, compared to 0.92% in FY23.

Cost Structure Analysis (as % of Revenue from Operations - FY24) #

• Cost of Materials Consumed: 62.79% (FY23: 61.46%)
• Purchases of Stock-in-Trade: 1.39% (FY23: 0.68%)
• Changes in Inventories: -1.11% (FY23: -0.74%)
• Employee Benefits Expense: 6.60% (FY23: 6.57%)
• Depreciation & Amortization: 1.69% (FY23: 1.87%)
• Other Expenses: 10.82% (FY23: 11.04%)

Note: Cost of materials consumed represents the largest cost component.

Margin Analysis (FY24 vs FY23) #

• Gross Profit Margin: Decreased to 36.93% in FY24 from 38.61% in FY23.
• Operating Profit Margin (PBT/Revenue from Ops): Decreased to 24.51% in FY24 from 27.10% in FY23.
• Net Profit Margin (PAT/Revenue from Ops): Decreased to 18.58% in FY24 from 20.20% in FY23.

Trend: Margins contracted in FY24 compared to FY23, indicating cost pressures despite revenue growth.

Operating Leverage #

• Revenue from Operations grew by 10.09% in FY24.
• Profit Before Tax (PBT) slightly decreased by 0.09% (from INR 18,362.24 Lakhs in FY23 to INR 18,345.03 Lakhs in FY24).
• The divergence suggests cost increases (primarily materials) outpaced revenue growth, leading to negative operating leverage or significant margin pressure during the period.

Non-recurring / Exceptional Items #

• The Statement of Profit and Loss indicates Nil under “Exceptional Items” for both FY24 and FY23.
• The Board’s Report details significant capital expenditures and acquisitions (land purchase for INR 5,658 Lakhs, Von Roll asset acquisition for INR 5,346 Lakhs plus taxes) funded by internal accruals, which are investment activities rather than P&L exceptional items.

Earnings Per Share (EPS) Analysis (FY24 vs FY23) #

• Basic EPS: Increased to INR 175.45 in FY24 from INR 173.20 in FY23.
• Diluted EPS: Increased to INR 175.45 in FY24 from INR 173.20 in FY23.

Note: Basic and Diluted EPS are the same, indicating no outstanding dilutive potential equity shares. The slight increase in EPS despite flat PBT is due to the slight increase in Profit After Tax (PAT) by 1.26%.

Financial Analysis of ELANTAS Beck India Ltd. - FY2024 Cash Management #

Cash Flow Analysis (FY2024 vs FY2023) #

• Operating Cash Flow (OCF): ₹6,322.30 (FY24) vs ₹13,341.82 (FY23).
  • Key Components (FY24): Profit Before Tax (₹18,345.03), Adjustments for non-cash items (Depreciation/Amortization: ₹1,690.32; Net gain on FVTPL investments: -₹3,940.37), Changes in Working Capital (Receivables: -₹2,266.44; Inventories: -₹2,119.38; Payables: ₹294.28), Direct Taxes Paid (₹3,989.45). The decrease in OCF is primarily driven by changes in working capital (inventories and receivables) and lower net gains on financial assets compared to FY23.
• Investing Cash Flow (ICF): ₹7,628.43 (FY24) vs -₹5,481.47 (FY23).
  • Key Components (FY24): Payments for PPE/Intangibles (₹14,514.10, including asset acquisition from Von Roll and land purchase), Net Investment Activity (Purchases: ₹25,970.57; Sales: ₹42,631.77), Net Fixed Deposit Activity (-₹3,570.00 + ₹7,863.00), Interest Received (₹1,188.33). The positive ICF in FY24 is mainly due to significant net proceeds from the sale of investments, offsetting the high capital expenditure.
• Financing Cash Flow (FCF): -₹455.19 (FY24) vs -₹396.38 (FY23).
  • Key Components (FY24): Dividends Paid (₹396.38), Interest Paid (₹58.81). FY23 only included Dividend Paid.
• Free Cash Flow (FCF) Calculation:
  • FCF (OCF - Capex) (FY24): ₹6,322.30 - ₹14,514.10 = -₹8,191.80
  • FCF (OCF - Capex) (FY23): ₹13,341.82 - ₹1,646.41 = ₹11,695.41
  • Analysis: FCF turned significantly negative in FY24 primarily due to the substantial increase in capital expenditures related to land purchase and asset acquisition, coupled with lower OCF.

Working Capital Management Efficiency #

• Ratios (FY24 vs FY23):
  • Current Ratio: 6.26 vs 6.11 (+2.29%)
  • Inventory Turnover Ratio: 5.61 vs 5.50 (+2.00%)
  • Trade Receivables Turnover Ratio: 6.55 vs 6.65 (-1.50%)
  • Trade Payables Turnover Ratio: 5.49 vs 5.15 (+6.60%)
• Analysis: The MD&A notes improved Net Working Capital due to focus on inventory and receivables management. The ratios show a stable Current Ratio, slightly improved inventory turnover, slightly slower receivables turnover, and faster payables turnover.
• Cash Conversion Cycle (CCC) Estimation:
  • DIO (365/Inventory Turnover): FY24 = 65 days; FY23 = 66 days
  • DSO (365/Receivables Turnover): FY24 = 56 days; FY23 = 55 days
  • DPO (365/Payables Turnover): FY24 = 66 days; FY23 = 71 days
  • CCC (DIO + DSO - DPO): FY24 = 65 + 56 - 66 = 55 days; FY23 = 66 + 55 - 71 = 50 days
  • Analysis: The estimated CCC increased slightly in FY24, indicating a marginally longer period to convert inventory and receivables into cash, primarily driven by faster payments to suppliers (lower DPO).

Capex Analysis by Segment (FY2024 vs FY2023) #

• Electrical Insulations: ₹7,867.26 vs ₹1,448.73
• Engineering & Electronic Resins and Materials: ₹147.58 vs ₹130.46
• Other and Unallocable Expenditure: ₹6,499.26 vs ₹67.22
• Total Capex: ₹14,514.10 vs ₹1,646.41
• Analysis: Total Capex increased substantially in FY24. While segment-specific capex saw a significant rise in Electrical Insulations, the largest portion of the increase falls under ‘Other and unallocable’, likely reflecting the land purchase (₹5,658 Lakhs) and asset acquisition from Von Roll (₹5,346 Lakhs) mentioned in the Board’s Report.

Dividend and Share Buyback #

• Dividend: The Board recommended a final dividend of ₹7.50 per equity share (75%) for FY24, subject to Member approval. This represents a 50% increase from the ₹5.00 per share (50%) paid for FY23. The total payout for FY24 is proposed at ₹594.58 Lakhs.
• Share Buyback: The Company did not undertake any share buyback activities during the financial year 2024.

Liquidity Position and Cash Conversion Cycle #

• Liquidity: The Current Ratio improved slightly to 6.26 in FY24 from 6.11 in FY23, indicating a very strong short-term liquidity position. Cash and cash equivalents stood at ₹13,962.11 Lakhs, and Other Bank Balances (short-term deposits) were ₹1,546.03 Lakhs as of December 31, 2024. Total Current Assets significantly exceed Total Current Liabilities (₹77,085.42 Lakhs vs ₹12,306.92 Lakhs).
• Cash Conversion Cycle (CCC): As calculated above, the estimated CCC increased from 50 days in FY23 to 55 days in FY24.

Free Cash Flow (FCF) Yield Trends #

• FCF Calculation:
  • FY24: -₹8,191.80 Lakhs
  • FY23: ₹11,695.41 Lakhs
• FCF Yield (FCF / Total Equity):
  • FY24: -₹8,191.80 / ₹86,711.94 = -9.45%
  • FY23: ₹11,695.41 / ₹73,199.41 = +15.98%
• Analysis: FCF yield experienced a significant downturn, moving from a strong positive 15.98% in FY23 to a negative 9.45% in FY24. This reversal is directly attributable to the substantial capital expenditure undertaken during FY24 for expansion and acquisitions, which vastly exceeded the operating cash flow generated during the year. While FY23 showed strong cash generation relative to equity, FY24 reflects a period of significant reinvestment.

ELANTAS Beck India Ltd. - Financial Analysis (FY24) #

Revenue and Profitability #

• Revenue Growth: Revenue from operations grew by 10.09% YoY to ₹74,851.31 Lakhs in FY24 from ₹67,989.00 Lakhs in FY23. Sales quantity increased by 10.74%.
• Profitability: PBT saw a marginal decline to ₹18,345.03 Lakhs from ₹18,362.24 Lakhs in FY23. PAT, including OCI, increased by only 1.26% to ₹13,908.91 Lakhs from ₹13,735.77 Lakhs.
• Margin Analysis: Margin compression occurred during FY24 due to cost increases, raw material availability concerns, and geopolitical disruptions. Operating Profit Ratio decreased from 27.10% to 24.51%, and Net Profit Ratio decreased from 20.19% to 18.65%.
• Dividend: A 50% dividend increase to ₹7.50 per share (₹5.00 in FY23) was recommended, totaling ₹594.58 Lakhs.

Market Position & Competition #

• Market Stance: Focus on strengthening presence in traditional electrical markets and developing new applications in electronics. Focus on technology leadership.
• Strategic Acquisition: Acquisition of Resin and Tapes assets from Von Roll (India) Private Limited (₹5,346 Lakhs consideration) to bolster market position and enhance technology offerings.
• Competitive Landscape: Increased competition due to slowdown in external markets.

Product/Segment Performance #

• Electrical Insulation (Approx. 84% of Revenue): Core segment comprising Wire Enamels (WE) and Secondary Insulation (LV/HV). Growth drivers include automotive/EV demand, power T&D infrastructure investment, and energy-efficient motors.
• Electronic & Engineering Materials (Approx. 16% of Revenue): Includes Electronic resins/compounds (EC) and Engineering Materials (EM). Sustained profitability in EC despite market slowness. EM saw traction with new value-added products.

Geographic Distribution & Market Penetration #

• Domestic Focus: Manufacturing operations based in India. Domestic consumption and investment trends are primary growth influencers.
• Export Market: Serves 14 export countries, but exports contributed only ~1% to total turnover in FY24.

Capital Expenditure & Returns #

• Significant Investment: Total Capex in FY24 was ₹14,514.10 Lakhs.
• Strategic Allocation:
  • Acquisition of 30 acres of land in Bharuch, Gujarat (₹5,658 Lakhs) for a new manufacturing facility.
  • Acquisition of Von Roll assets (₹5,346 Lakhs).
• Segment Capex (FY24): Electrical Insulation: ₹7,821.46 Lakhs; Engineering & Electronic Materials: ₹200.54 Lakhs; Other/Unallocable: ₹6,492.10 Lakhs.
• Return Metrics:
  • ROCE: 22.68% (vs. 25.54% in FY23, -11.20% variation)
  • ROE: 17.46% (vs. 20.64% in FY23, -15.41% variation)
  • ROI: 19.36% (vs. 23.06% in FY23, -16.05% variation)

Operational Efficiency #

• Energy Conservation: Reduced energy consumption per unit (Gas -3.2%, Electricity -3.8%). ₹97 Lakhs invested in energy conservation.
• Technology & R&D: R&D expenditure was 1.12% of turnover. 14 new product launches in FY24.
• Manufacturing & Quality: Focus on operational improvements, de-bottlenecking, automation, and capacity expansion.

Growth Initiatives & Strategic Developments #

• Expansion: Establishment of a new greenfield manufacturing facility in Gujarat

ELANTAS Beck India Ltd. - Financial Risk Analysis (FY2024) #

Overall Financial Performance Summary (FY24 vs FY23) #

• Revenue from Operations: Increased 10.09% to ₹74,851.31 Lakhs (vs. ₹67,989.00 Lakhs). Sales quantity increased 10.74%.
• Profit Before Tax (PBT): Marginally decreased to ₹18,345.03 Lakhs (vs. ₹18,362.24 Lakhs).
• Profit After Tax (PAT): Increased 1.26% to ₹13,908.91 Lakhs (vs. ₹13,735.77 Lakhs).
• Operating Profit Ratio: Decreased to 24.51% (vs. 27.10%).
• Net Profit Ratio: Decreased to 18.65% (vs. 20.19%).
• Return on Equity (ROE): Decreased significantly to 17.46% (vs. 20.64%).
• Return on Capital Employed (ROCE): Decreased to 22.68% (vs. 25.54%).
• Capital Expenditure: ₹14,514.10 Lakhs.
• Dividend: Recommended increase to ₹7.50/share (vs. ₹5.00/share).
• Working Capital: Management focus led to improvement (Current Ratio stable at 6.26 vs 6.10).

Risk Analysis #

Strategic Risks #

Market Demand Volatility #

• Severity: Moderate. Directly impacts revenue and profitability.
• Likelihood: High. Acknowledged by management (MD&A notes typical volume cycle, subdued H2 demand).
• Trend: Stable/Fluctuating. Dependent on Indian economic growth, industrial production, infrastructure investment, and EV segment pace.
• Mitigation: Price-volume management, focus on value-added segments, expansion into emerging applications (electronics, e-mobility), monitoring market trends (EV, power transmission, energy efficiency, smart cities), R&D for innovative solutions.
• Control Effectiveness: Demonstrated resilience with 10% revenue growth despite volatility. Strategic investments (Von Roll acquisition, new Gujarat facility) aim to capture growth opportunities.
• Financial Impact: Potential pressure on margins (Operating Profit Ratio decreased YoY), need for continuous R&D investment (1.12% of turnover).

Competitive Activity #

• Severity: Moderate. Increased competition noted due to external market slowdowns.
• Likelihood: Moderate to High.
• Trend: Increasing. External market slowdowns pushing competitors.
• Mitigation: Maintaining technological leadership, R&D focus (14 new solutions launched), strong customer relationships, quality focus (low customer complaints), value-added product introductions, Von Roll acquisition enhancing portfolio.
• Control Effectiveness: Company maintained market position, achieving record revenue. Awards reflect quality/innovation commitment.
• Financial Impact: Potential pricing pressure impacting margins. Need for sustained R&D and potentially higher marketing/sales expenses.

Acquisition/Expansion Integration & Execution #

• Severity: Moderate to High. Integration of Von Roll assets and execution of new Gujarat facility are key to future growth.
• Likelihood: Moderate. Integration risks are inherent; project execution delays/cost overruns possible.
• Trend: Increasing short-term due to recent acquisition and new project initiation.
• Mitigation: Use of internal accruals reduces financial strain, experienced management team, phased project execution likely.
• Control Effectiveness: Von Roll integration reported as successful in MD&A. Gujarat project execution TBD. Board oversight exists.
• Financial Impact: Significant Capex deployed (₹5,658 Lakhs for land, ₹5,346 Lakhs for Von Roll assets, Total Capex ₹14,514.10 Lakhs). Successful execution crucial for ROI and future revenue streams. Integration issues could impact operational efficiency and costs.

Operational Risks #

Raw Material Price & Availability Volatility #

• Severity: High. Explicitly mentioned as “unprecedented cost increases and related availability concerns” and impacting margins.
• Likelihood: High. Driven by external factors (geopolitics, supply chains).
• Trend: High Volatility. Persists due to ongoing conflicts (MD&A).
• Mitigation: Effective price-volume management, evaluation/approval of alternative raw materials/suppliers (R&D focus), maintaining supplier relationships.
• Control Effectiveness: Company managed to ensure supply continuity and achieve volume growth, but profitability ratios declined, indicating margin pressure.
• Financial Impact: Direct impact on Cost of Materials Consumed (up YoY) and profitability margins (Operating/Net Profit ratios down). Inventory turnover remained stable (5.61 vs 5.50).

Supply Chain Disruptions #

• Severity: Moderate to High. Linked to geopolitical conflicts (Russia-Ukraine, Middle East).
• Likelihood: Moderate. Ongoing external events.
• Trend: Stable/Elevated due to persistent geopolitical issues.
• Mitigation: Leveraging group (ALTANA) sourcing capabilities, alternative supplier development, inventory management (though inventory value increased YoY).
• Control Effectiveness: Company maintained operations and grew sales despite disruptions mentioned in MD&A.
• Financial Impact: Potential for increased logistics costs, production delays, or inability to meet demand.

Manufacturing Operations & EHS (Environment, Health, Safety) #

• Severity: High. Chemical manufacturing inherent risks; regulatory scrutiny (GPCB order history).
• Likelihood: Low to Moderate. Strong focus indicated by certifications, awards, and stated priorities.
• Trend: Improving/Stable. Focus on Process Safety Management (PSM), automation, capacity expansion with modern tech, audits, ISO certifications (9001, 14001, 45001), safety awards received in FY24. LTIFR reported as 0.
• Mitigation: PSM implementation, ISO certifications, regular audits (5S, Safety, HIRA, PTW, LOTO), training & mock drills, PPE provision, infrastructure upgrades (scrubbers, fire hydrants, warehouse, DCS room), focus on energy/water conservation, waste management protocols.
• Control Effectiveness: Certifications maintained, safety awards won, zero LTIFR reported. GPCB order remains a concern but temporary revocation granted until July 2025. Waste management practices detailed.
• Financial Impact: Cost of compliance, training, safety investments (e.g., Scrubber system, new warehouse). Potential fines/closure impact (GPCB history) if non-compliant. Energy conservation measures show positive impact (3.2% gas, 3.8% electricity reduction per unit).

Human Capital Management #

• Severity: Moderate. Attracting and retaining skilled talent is crucial in a specialized industry.
• Likelihood: Moderate. Typical industry challenge.
• Trend: Stable. Employee turnover rate for permanent employees was 8.33% (vs 12.55% in FY23).
• Mitigation: Training & development (avg 18 hours/employee vs 14), leadership workshops, Learning Management System, performance reviews (100% coverage), focus on well-being (health/accident insurance coverage), adherence to POSH Act (Nil complaints).
• Control Effectiveness: Improved training hours, stable workforce indicated by lower turnover. Performance review system in place.
• Financial Impact: Costs associated with training, benefits, and potential recruitment costs if turnover increases.

Financial Risks #

Profitability Pressure #

• Severity: Moderate. PBT flat, PAT growth minimal despite revenue increase. Ratios like Operating Profit, Net Profit, ROE, ROCE declined YoY.
• Likelihood: High. Driven by raw material costs and competitive pressure.
• Trend: Increasing pressure indicated by declining YoY ratios.
• Mitigation: Focus on value-added products, cost control measures (energy savings, process efficiency), price-volume management, R&D for cost-effective formulations.
• Control Effectiveness: Mitigations partially effective (revenue grew), but margin pressure evident.
• Financial Impact: Reduced profitability, potentially impacting shareholder returns (though dividend increased) and funds for future investment if sustained.

Foreign Exchange Risk #

• Severity: Low to Moderate. Primarily USD/EUR exposure from short-term receivables/payables.
• Likelihood: High. Inherent in international trade.
• Trend: Exposure increased YoY (Forex outgo up from ₹10,802.68 Lakhs to ₹15,942.53 Lakhs). Net liability exposure noted in FY24 vs net asset exposure in FY23 (per disclosures, though amounts seem small relative to turnover).
• Mitigation: Risk management framework in place, though specific hedging activities were not undertaken. Monitoring exposure.
• Control Effectiveness: Management deems fluctuations generally not significant.

ELANTAS Beck India Ltd. - FY24 Financial Analysis #

Long-term Strategic Goals and Progress #

• Expansion and Realignment: Actively pursuing expansion and strategic realignment of manufacturing operations in India.
• Key Action: Acquired 30 acres of land in Payal Industrial Park, Gujarat, for ₹5,658 Lakhs for a new manufacturing facility.
• Market Focus: Strengthening position in traditional electrical insulation while expanding into electronics and E-Mobility.
• Progress: Land acquisition and integration of Von Roll acquisition align with strengthening the core electrical insulation business. Ongoing R&D supports entry into emerging markets.

Competitive Advantages and Market Positioning #

• Technology Leadership: Leveraging global R&D within the ALTANA group for innovative solutions.
• Market Presence: Significant position in electrical insulation (Wire Enamels and Secondary Insulation, ~84% of revenue). Aims to maximize value through price-volume management.
• Customer Relationships: Long-standing reputation, customer relationships, and technical service standards are key differentiators.
• Local Manufacturing: Strong local manufacturing capabilities.

Innovation Initiatives and R&D Effectiveness #

• R&D Focus: New product development (14+ launches in 2024), cost reduction, process improvements, and technology absorption. Focus areas: E-Mobility, Power, Solar Energy, and Motors/Generators.
• Expenditure: R&D expenditure: ₹898.04 Lakhs (1.12% of total turnover).
• Technology Absorption: Actively absorbs technology from overseas affiliates (e.g., VOC-free resins, water-based varnish, epoxy compounds).
• Effectiveness: New products (e.g., potting products for E-Mobility), localization of global resins, and cost/process improvements. Participation in global ALTANA R&D projects.

M&A Strategy and Execution #

• Strategic Acquisition: Acquired assets related to the Resin and Tapes product business from Von Roll (India) Private Limited for ₹5,346 Lakhs plus taxes.
• Objective: Enhance technology offerings and increase contribution from the core Electrical Insulation Business.
• Integration: Successful integration of Von Roll India’s assets and customer relationships in FY24.

Management’s Track Record in Execution #

• Financial Performance: Record revenue of ₹74,851.31 Lakhs (10.09% YoY growth) and volume growth of 10.74% in FY24. PBT was largely flat, and PAT saw marginal growth of 1.26%. Net cash from operations decreased significantly.
• Navigating Challenges: Navigated raw material cost volatility and supply chain disruptions through price-volume management.
• Strategic Execution: Successfully executed the purchase of land and the acquisition and integration of Von Roll assets within FY24.
• Recognition: Received safety and environment excellence awards.

Capital Allocation Strategy #

• Capital Expenditure: Significant capital expenditure of ₹14,514.10 Lakhs in FY24, driven by land purchase (₹5,658 Lakhs) and Von Roll asset acquisition (₹5,346 Lakhs).
• Funding: Investments funded through internal accruals.
• Dividends: Increased dividend of ₹7.50 per share (75% payout) for FY24. Total payout: ₹594.58 Lakhs.
• Reserves: No amount transferred to general reserves.
• Other: No share buybacks, ESOPs, or sweat equity issues. No new loans, guarantees, or investments under Section 186.

Organizational Changes and Their Impact #

• Board Composition: Maintained a mix of Executive, Non-Executive, and Independent Directors.
• Leadership Transition: Mr. Srikumar Ramakrishnan stepped down as MD (moving within ALTANA group), and Mr. Anurag Roy was appointed MD effective Feb 1, 2025.
• Key Personnel: Mr. Ashutosh Kulkarni appointed Head-Legal & Company Secretary (KMP). Mr. Sanjay Kulkarni continues as CFO.
• Impact: Leadership transition managed within the group, aiming for continuity. Appointment of a new Company Secretary strengthens the legal and compliance function.

Financial Performance Analysis (FY24 vs FY23) #

Revenue Growth #

Revenue from operations increased by 10.09% to ₹74,851.31 Lakhs, driven by a 10.74% increase in sales quantity (32,491 MT vs 29,339 MT).

Profitability #

• Profit Before Tax (PBT) remained relatively flat at ₹18,345.03 Lakhs compared to ₹18,362.24 Lakhs in FY23.
• Profit After Tax (PAT), including Comprehensive Income, saw marginal growth of 1.26%, reaching ₹13,908.91 Lakhs from ₹13,735.77 Lakhs.
• Operating Profit Margin decreased to 24.51% from 27.10%.
• Net Profit Margin decreased to 18.65% from 20.19%.

Key Ratios #

• Return on Equity (RoE) decreased to 17.46% from 20.64%.
• Return on Capital Employed (RoCE) decreased to 22.68% from 25.54%.
• Inventory Turnover Ratio remained stable at 5.61.
• Receivables Turnover Ratio was stable at 6.55.

Cash Flow #

Net cash flow from operating activities decreased significantly to ₹6,322.30 Lakhs from ₹13,341.82 Lakhs in FY23. Cash flow from investing activities turned positive (₹7,973.75 Lakhs vs -₹4,284.97 Lakhs), primarily due to higher proceeds from the sale of investments compared to purchases and CAPEX.

Balance Sheet #

Total assets grew to ₹1,01,534.14 Lakhs from ₹88,110.01 Lakhs. Total equity increased to ₹86,711.94 Lakhs from ₹73,199.41 Lakhs. The company remains debt-free.

Key Business Developments & Strategy #

Expansion #

Executed a ‘Deed of Conveyance’ for 30 acres of land in Bharuch, Gujarat (₹5,658 Lakhs, funded by internal accruals) for establishing a new manufacturing facility aimed at synergy, expansion, and realignment for growth.

Acquisition #

Acquired assets related to the Resin and Tapes product business from Von Roll (India) Private Limited for ₹5,346 Lakhs plus taxes. This aims to enhance offerings in the Electrical Insulation Business.

Market Focus #

Continued focus on strengthening presence in the electrical segment (84% of revenue) while developing applications in emerging markets like electronics (16% revenue) and e-mobility.

Outlook #

Anticipates demand aligned with overall economic growth, influenced by industrial production, EV segment growth, power transmission investments, and government infrastructure initiatives. Acknowledges risks from demand volatility, supply chain disruptions (geopolitical conflicts), regulatory changes, and currency fluctuations.

Operational & Sustainability Highlights #

Capital Expenditure #

Incurred ₹14,514.10 Lakhs in CAPEX during FY24, reflecting investments in land, asset acquisition, and ongoing projects.

Technical Management #

Commissioned a new ‘Green Building’ Finished Goods warehouse in Ankleshwar. Installed scrubber systems at both plants for VOC/emission reduction. Ongoing projects include DCS upgrades, energy conservation measures, solvent recovery plant augmentation, and auto packing lines.

Energy Conservation #

Reported reduction in energy consumption per unit of production (3.2% gas, 3.8% electricity) through various initiatives (e.g., efficient cooling tower, ETP optimization, automation). Spent ₹97 Lakhs on energy conservation equipment.

R&D #

R&D expenditure was ₹898.98 Lakhs (1.12% of turnover). Launched over 14 new solutions targeting Automotive (including E-Mobility), Power, Solar, and Motors/Generators markets. Continued focus on localization and cost efficiency.

Environmental Performance (BRSR Data) #

• Total Energy Consumed: 70,204.93 GJ (Intensity: 0.938 GJ/INR Million Turnover)
• Total Water Withdrawal: 75,173 KL (Intensity: 1.00 KL/INR Million Turnover)
• Scope 1 & 2 GHG Emissions: 6,804 tCO2e (Intensity: 0.091 tCO2e/INR Million Turnover)
• Hazardous Waste Generated: 2,707.7 MT; Non-Hazardous: 238.4 MT.

Health & Safety #

Maintained ISO 45001 certification. Reported zero Lost Time Injury Frequency Rate (LTIFR), zero fatalities, and zero high-consequence work-related injuries for both employees and workers in FY24. Received ‘Best Safety Initiative for Worker’s Safety Award’ 2024.

ELANTAS Beck India Ltd. - FY24 Financial Analysis #

Financial Performance Analysis #

Revenue Growth #

Revenue from operations increased by 10.09% to ₹74,851.31 Lakhs in FY24 from ₹67,989.00 Lakhs in FY23. Sales quantity saw a corresponding rise of 10.74% (32,491 MT vs 29,339 MT).

Profitability #

• Profit Before Tax (PBT) remained largely flat at ₹18,345.03 Lakhs compared to ₹18,362.24 Lakhs in FY23.
• Profit After Tax (PAT), including Other Comprehensive Income, grew marginally by 1.26% to ₹13,908.91 Lakhs from ₹13,735.77 Lakhs.

Margin Analysis #

Profitability metrics indicate margin pressure.

• Operating Profit Ratio decreased from 27.10% in FY23 to 24.51% in FY24 (-9.56% change).
• Net Profit Ratio decreased from 20.19% to 18.65% (-7.63% change).
• Increased Cost of Materials Consumed (₹46,120.48 L vs ₹41,335.88 L) supports this pressure.

Return Ratios #

Efficiency in generating returns showed a slight decline.

• Return on Equity (ROE) decreased from 20.64% to 17.46% (-15.41% change).
• Return on Capital Employed (ROCE) decreased from 25.54% to 22.68% (-11.20% change).

Turnover Ratios #

Ratios related to working capital management remained relatively stable (Inventory: +2.00%, Trade Receivables: -1.50%, Trade Payables: +6.60%). Net Capital Turnover Ratio improved slightly by 8.41%.

Cash Flow #

Net cash flow from operating activities significantly decreased to ₹6,322.30 Lakhs from ₹13,341.82 Lakhs in FY23, primarily due to less favorable working capital changes. Investing activities saw a net outflow of ₹7,572.74 Lakhs, driven by substantial capital expenditure (₹14,514.10 L) including asset acquisitions, offset partially by net proceeds from investment activities and fixed deposit movements.

Dividend #

A final dividend of ₹7.50 per share (75%) has been recommended for FY24, an increase from ₹5.00 per share in FY23. The total payout, subject to approval, will be ₹594.58 Lakhs. The record date is April 23, 2025, with payment by May 29, 2025.

Segment Performance #

Electrical Insulation (Approx. 84% of Revenue) #

• Core business comprising Wire Enamels (WE) and Secondary Insulation (LV/HV).
• Performance driven by maximizing value through volume growth and price management aligned with raw material costs. Integration of Von Roll India’s resins and tapes assets contributed positively.
• Market trends influencing performance include automotive segment demand (incl. EV), power transmission investments (transformer segment), energy-efficient motors, and government initiatives (smart cities, sustainable energy, EV infra).

Electronic & Engineering Materials (Approx. 16% of Revenue) #

• Includes Electronic resins/compounds (EC), hardeners, and Engineering Materials (EM) for industrial flooring, coatings, adhesives etc.
• Focus on new product/application development (esp. electronics, E-Mobility), improved engagement, and business efficiency to manage market slowdown and pricing pressure.
• Anticipated growth supported by market revival, R&D, technical support, and recent investments in manufacturing capacity.

Strategic Initiatives and Key Developments #

Capacity Expansion (Gujarat Project) #

Acquired 30 acres of land in Bharuch, Gujarat for ₹5,658 Lakhs (funded by internal accruals) to establish a new manufacturing facility. This aims to synergize, expand, and realign manufacturing operations for future growth opportunities.

Inorganic Growth (Von Roll Asset Acquisition) #

Acquired assets related to Resin and Tapes product business from Von Roll (India) Private Limited for ₹5,346 Lakhs plus taxes. This enhances technology offerings and solutions in the Electrical Insulation segment.

Capital Expenditure #

Total CAPEX in FY24 was ₹14,514.10 Lakhs, significantly higher than typical levels, reflecting the land purchase and asset acquisition alongside ongoing projects. FY25 pipeline includes DCS upgrade, energy conservation projects, solvent recovery augmentation, and auto packing lines.

Research & Development #

R&D expenditure was 1.12% of turnover (FY23: 1.17%). Focus on new product development (14+ launches in FY24 for Auto/EV, Power, Solar, Motors), cost savings (formula management, alternate raw materials), process upgrades, and technology absorption from global affiliates (5 imported technologies being absorbed). Active participation in global R&D projects.

Sustainability & Efficiency #

Continued focus on energy conservation (achieved 3.2% reduction in Gas, 3.8% in electricity per unit), process safety management (PSM), automation, operational excellence.

ELANTAS Beck India Ltd. - Financial Analysis Report (FY2024) #

Auditor’s Opinion and Qualifications #

• Statutory Auditors (Price Waterhouse Chartered Accountants LLP): Unmodified opinion on FY2024 financial statements, conforming to Ind AS and the Companies Act, 2013.
• Key Audit Matter: Revenue Recognition. Procedures included control testing, contract terms alignment, transaction price determination, period cut-off, journal testing, and disclosure evaluation. No significant exceptions identified.
• Internal Financial Controls (IFCFR): Unmodified opinion, stating adequate IFCFR system operating effectively as of December 31, 2024.
• Auditors’ Report Rule 11 Comments:
  • Disclosure of pending litigations impact noted (Note 34a).
  • No material foreseeable losses on long-term contracts identified.
  • No delay in IEPF transfers noted.
  • Representations regarding fund flows (layering) under Rule 11(e) were noted without material misstatement observed.
  • Dividend declaration/payment compliant with Section 123.
  • Exceptions Noted:
    • Backup of certain electronic books of account was not maintained daily on servers physically located in India throughout the year (Note 42a).
    • Issues with audit trail (edit log) functionality in SAP (partially non-operational Jan-Sep 2024 at application level for certain data/users; database level logs lacked pre-modified values Oct-Dec 2024; no direct data change log Jan-Oct 2024) and lack of audit trail in MS Excel used for certain functions (Note 42b, Note 1(h)(vi)).
• Cost Auditors (Dhananjay V. Joshi & Associates): The Cost Audit Report for FY2023 contained no qualifications, reservations, or adverse remarks.
• Secretarial Auditors (Prajot Tungare & Associates): The Secretarial Audit Report for FY2024 (Annexure C) contained no qualifications, reservations, or adverse remarks.
• Overall: No qualifications, reservations, or adverse remarks in the main opinions, although specific compliance exceptions related to IT controls/record keeping were noted by the Statutory Auditor.

Key Accounting Policies and Changes #

• Compliance: Financial statements comply with Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013.
• Basis: Historical cost convention, except for certain financial assets/liabilities measured at fair value and defined benefit plan assets measured at fair value.
• Revenue Recognition (Ind AS 115): Recognized when control transfers to the customer, measured at the transaction price net of discounts, rebates, and taxes (GST).
• Property, Plant & Equipment (PPE): Historical cost less accumulated depreciation and impairment. Straight-line depreciation over estimated useful lives.
• Intangible Assets: Cost less accumulated amortization and impairment. Goodwill tested annually for impairment. Finite useful lives (5-10 years) for Technical Know-how, Customer Relationships, and Non-Compete Rights.
• Financial Instruments (Ind AS 109): Classified based on business model and cash flow characteristics. Impairment uses the Expected Credit Loss (ECL) model.
• Inventories: Valued at lower of cost (weighted average) and net realizable value.
• Leases (Ind AS 116): Right-of-use assets and corresponding lease liabilities recognized at lease commencement.
• Taxes: Current tax calculated based on enacted tax laws. Deferred tax recognized using the liability method on temporary differences.
• Critical Estimates & Judgements: Involved in determining useful lives of PPE/intangibles, defined benefit obligations, ECL on receivables, recoverability of deferred tax assets, legal contingencies, segment reporting, and fair value of investment properties.
• Changes: No revisions to financial statements occurred during FY24. No material impact from recent amendments to Ind AS 116 (Leases). Policies appear consistently applied.

Internal Control Effectiveness #

• Management/Board Opinion: The Board expressed the opinion that the Company’s internal financial controls were adequate and effective during FY 2024.
• Statutory Auditor Opinion (Annexure A): Adequate internal financial controls system with reference to financial statements, operating effectively as at December 31, 2024.
• Auditor Exceptions (Rule 11 Reporting): Deficiencies regarding non-compliance with Rule 11(g) and Sec 143(3)(b) related to daily backups on India-based servers and the completeness/functionality of audit trails in SAP and the lack thereof in MS Excel.
• Mechanisms: Established internal financial control framework, reviewed by management and tested by internal audit team. Audit observations and corrective actions presented to the Audit Committee. Vigil Mechanism/Whistle Blower Policy is in place.

Regulatory Compliance Status #

• Overall Compliance: Compliance with applicable laws and SEBI regulations (LODR, Takeover, Insider Trading etc.) during FY2024. Compliance with Secretarial Standards is affirmed.
• Specific Compliances:
  • POSH Act: Policy in place, ICC constituted, zero complaints reported in FY24.
  • IEPF: Unclaimed dividends and corresponding shares transferred as per Section 124/125.
  • Code of Conduct: Adopted, compliance affirmed by Directors/Senior Management.
  • Related Party Transactions: Compliance with Section 177/188 and LODR.
  • Director Disqualification: None reported (Sec 16