Manaksia Coated Metals & Industries Ltd.: A Comprehensive Overview #
About the Company #
Year of Establishment and Founding History:
- Established in 2003, although the Manaksia Group, the parent company, has a longer history.
Headquarters Location and Global Presence:
- Headquartered in Kolkata, India.
- Global presence with manufacturing facilities and sales networks in multiple countries including India, Nigeria, Ghana and Dubai.
Stock Exchange Listing Details and Market Capitalization:
- Listed on the Bombay Stock Exchange (BSE: 539726) and National Stock Exchange (NSE: MANAKSIA).
Recent Financial Performance Highlights:
- Consult the company’s official website and financial statements for the most up-to-date information.
Management Team and Leadership Structure:
- The Manaksia Group is led by a board of directors with key management personnel overseeing specific areas of operations.
Their Products #
Complete Product Portfolio with Categories:
- Coated Steel: Color Coated Steel Sheets and Coils (PPGI, PPGL), Galvanized Steel Sheets and Coils (GI), Galvalume Steel Sheets and Coils (GL).
- Other Products: Roofing sheets, pre-engineered buildings, etc.
Key Technological Innovations or Patents:
- Focus on developing high-performance coatings for enhanced corrosion resistance and durability.
Manufacturing Facilities and Production Capacity:
- Multiple manufacturing facilities located in India and other countries.
Quality Certifications and Standards:
- ISO 9001 certification for quality management systems.
Any Unique Selling Propositions or Technological Advantages:
- Customization options for color, thickness, and coatings.
- Emphasis on providing durable and aesthetically pleasing products.
Primary Customers #
Target Industries and Sectors:
- Construction industry (roofing, cladding, pre-engineered buildings)
- Appliance industry (white goods, consumer durables)
- Automobile industry (body panels, components)
- General engineering industry (fabrication, structural applications)
- Agriculture (grain storage, roofing of farm structures)
Geographic Markets (Domestic vs. International):
- Presence in both domestic (Indian) and international markets.
- Significant export focus in Africa and the Middle East.
Distribution Network and Sales Channels:
- Direct sales to large customers.
- Network of dealers and distributors.
- Export sales through agents and trading companies.
Major Competitors #
Direct Competitors in India and Globally:
- Tata Steel BSL
- JSW Steel
- Essar Steel India Ltd.
- Bhushan Steel
- ArcelorMittal
- Nippon Steel & Sumitomo Metal Corporation
How They Differentiate from Competitors:
- Strong customer relationships.
- Focus on specific market segments (e.g., African market).
Future Outlook #
Expansion Plans or Growth Strategy:
- Expansion into new geographic markets.
- Increased investment in research and development to develop innovative products.
Sustainability Initiatives or ESG Commitments:
- Implementation of environmentally friendly manufacturing processes.
- Use of recycled materials in production.
Industry Trends Affecting Their Business:
- Growing demand for pre-engineered buildings.
- Increased focus on energy-efficient building materials.
- Government initiatives to promote infrastructure development.
Comprehensive Performance Overview #
Detailed Analysis #
Balance Sheet Analysis #
Financial Analysis Report: Manaksia Coated Metals & Industries Limited (FY2024) #
Revenue Analysis #
Overall Performance #
- Consolidated revenue from operations for FY2024 stood at ₹73,998.93 lacs, an increase of 13.54% from ₹65,174.03 lacs in FY2023.
- Standalone revenue from operations for FY2024 was ₹73,962.25 lacs, up 13.51% from ₹65,160.61 lacs in FY2023. The growth is attributed to strong demand for both Pre-Painted and Galvanized Steel products and a strategic focus on value-added products.
Segmental Revenue (Consolidated) #
- Metal Products: Revenue increased by 13.56% to ₹72,420.78 lacs in FY2024 from ₹63,772.70 lacs in FY2023. This segment remains the primary revenue driver, contributing approximately 97.87% of total consolidated operating revenue in FY2024.
- Others (Household Products): Revenue grew by 12.62% to ₹1,578.15 lacs in FY2024 from ₹1,401.33 lacs in FY2023.
Geographical Revenue (Consolidated) #
- India (Domestic): Revenue decreased slightly by 3.00% to ₹49,756.16 lacs in FY2024 from ₹51,295.27 lacs in FY2023. Domestic sales constituted 67.24% of total operating revenue.
- Overseas (Export): Revenue saw a significant increase of 74.68% to ₹24,242.77 lacs in FY2024 from ₹13,878.76 lacs in FY2023. Export sales contributed 32.76% of total operating revenue, highlighting successful expansion in international markets. The company maintains a consistent export exposure of roughly 30%.
Product Focus & Sales Growth #
The company has prioritized sales of value-added Pre-Painted Steel, with volumes growing from 28,781 MT in FY2020 to 61,479 MT in FY2024 (an increase of over 113%). Total coated steel sales volumes (Pre-Painted and Galvanized) increased from 38,690 MT in FY2020 to 89,966 MT in FY2024.
Cost Structure Analysis (Consolidated FY2024 vs FY2023) #
Cost of Materials Consumed #
Cash Management #
Cash Flow and Liquidity Analysis #
Key Performance Indicators #
Financial Performance Analysis of Manaksia Coated Metals & Industries Limited (MCMIL) for FY 2023-24 #
Standalone Performance #
Revenue from Operations #
Increased by 13.51% to ₹73,962.25 Lacs in FY24 from ₹65,160.61 Lacs in FY23.
Profit Before Tax (PBT) #
Increased by 107.31% to ₹1,530.47 Lacs in FY24 from ₹738.24 Lacs in FY23.
Profit After Tax (PAT) #
Increased by 146.89% to ₹1,239.69 Lacs in FY24 from ₹502.04 Lacs in FY23.
Earnings Per Share (EPS) #
Increased to ₹1.84 in FY24 from ₹0.77 in FY23.
Profit Margin Before Tax % #
Improved to 2.07% in FY24 from 1.14% in FY23.
Net Profit Margin Ratio % #
Improved to 1.68% (1239.69/73962.25) in FY24 from 0.77% (502.04/65160.61) in FY23.
Consolidated Performance #
Revenue from Operations #
Increased by 13.54% to ₹73,999.95 Lacs in FY24 from ₹65,174.03 Lacs in FY23.
Profit Before Tax (PBT) #
Increased by 16.82% to ₹1,453.40 Lacs in FY24 from ₹1,244.11 Lacs in FY23.
Profit After Tax (PAT) #
Increased by 9.15% to ₹1,184.89 Lacs in FY24 from ₹1,085.54 Lacs in FY23.
Risk Framework #
Comprehensive Risk Assessment #
Financial Analysis: Manaksia Coated Metals & Industries Limited (MCMIL) - FY 2024 #
Strategic Goals and Progress #
MCMIL’s strategy focuses on high-value coated steel production, particularly Pre-Painted Steel, expanding manufacturing capabilities via backward integration and technological upgrades.
- Focus on Value-Added Products: Prioritizing Pre-Painted Steel sales, with substantial growth from FY 2020 to FY 2024.
- Capacity Enhancement:
- Colour Coating Line (CCL): Increased CCL production capacity significantly by upgrading electrical automation.
- Galvanizing Line (CGL) & Alu-Zinc Conversion: Converting the existing Galvanizing Line to Alu-Zinc Coating, expected to increase production capacity. Completion anticipated in FY 2025.
- Backward Integration & Further Expansion: Plans for a new Cold Rolling Complex and a second appliance-grade Colour Coating Line.
- Export Market Penetration: Maintaining consistent export sales exposure, leveraging access to Mundra Port.
- Product Diversification (Non-Steel): Continued Ultramarine Blue Powder production.
Progress is seen in CCL capacity enhancement, Pre-Painted Steel volume growth, and the Alu-Zinc conversion. Warrants issued in FY24 indicate funding for strategic expansions.
Competitive Advantages and Market Positioning #
MCMIL has several competitive advantages:
- Product Quality and Value Addition: Specializes in high-quality coated steel products, focusing on value-added offerings like Alu-Zinc.
- Advanced Manufacturing Facilities: State-of-the-art facility in Kutch, Gujarat, equipped with Continuous Colour Coating and Galvanizing Lines.
- Strategic Sourcing: Procures raw materials from renowned manufacturers ensuring quality.
- Customization Capabilities: High versatility in product customization.
- Certifications and Brand Recognition: Holds certifications and owns established brands.
- Market Reach: Strong customer base across India and internationally, serving diverse sectors. Strategic location near ports facilitates efficient export logistics.
- Operational Efficiency: Focus on improving plant efficiencies and reducing operational costs.
MCMIL is positioned as a key player in the value-added coated steel segment, leveraging technology, quality, and market reach.
Innovation Initiatives and R&D Effectiveness #
Innovation at MCMIL focuses on process improvements, technological upgrades, and capacity enhancements.
- Technological Advancement: Alu-Zinc Coating conversion.
- Process Automation & Efficiency: Upgrading CCL’s electrical automation system and installing a thermal incinerator. Fully automated Ultramarine Blue plant.
- Product Development (via Technology Adoption): Introduction of Alu-Zinc coated steel.
- Technology Absorption: Efforts in improving manufacturing processes, implementing automation, and installing upgraded pollution control equipment.
MCMIL demonstrates innovation through technology adoption, process optimization, and strategic investments leading to enhanced product quality, increased capacity, and operational efficiencies.
Management’s Track Record in Execution #
Management has a positive track record in executing strategic priorities:
- Sales Growth of Value-Added Products: Increased Pre-Painted Steel sales significantly.
- Overall Volume Growth: Achieved steady growth in coated steel sales volumes.
- Capacity Enhancement Projects: Completed CCL production capacity boost. The Alu-Zinc conversion project is progressing.
- Financial Performance: Consistent financial growth with increased revenue, EBITDA, and net profit. Reduced debt-to-equity ratio.
- Export Market Management: Maintained export sales.
- Capital Raising: Successfully issued warrants for expansion projects.
Meeting production targets, achieving sales growth, and improved financial metrics indicate effective execution by management.
ESG Framework at Manaksia Coated Metals & Industries Limited (MCMIL) #
Environmental Metrics and Targets #
MCMIL demonstrates a commitment to environmental management through several initiatives and certifications. The company actively promotes a “Green Initiative” by encouraging shareholders to opt for electronic communications to reduce paper consumption and carbon footprint. MCMIL holds ISO 14001:2015 certification for Environmental Management Systems.
Energy conservation measures reported include maintenance of near-unity power factor, use of agro-based fuel in mosquito coil manufacturing, utilization of natural lighting, replacement of conventional lamps with energy-efficient alternatives, and conducting energy conservation training programs. An alternate energy source, a Thermal Fluid heating system, is used for drying mosquito coils. A key project enhancing environmental performance was the upgrade of the Continuous Colour Coating Line (CCL) in April 2022, which included the installation of a new thermal incinerator to improve fuel efficiency. For the reported financial year, capital investment specifically designated for energy conservation equipment was stated as NIL.
Social Responsibility Programs #
MCMIL’s social responsibility is primarily executed through its Corporate Social Responsibility (CSR) activities and employee welfare measures. The company has a CSR policy, with activities focused on areas such as rural development (including livestock), promotion of education, protection of fauna, and healthcare, with a preference for local areas around its operations. For FY 2023-24, the CSR obligation was Rs. 16.89 lakhs (calculated from an average net profit of Rs. 908.88 lakhs, a 2% obligation of Rs. 18.18 lakhs, less a set-off of Rs. 1.32 lakhs from previous years), which was fully spent. As the CSR expenditure did not exceed Rs. 50 lakhs, the functions of the CSR Committee are discharged by the Board of Directors.
The company maintains a policy on Prevention of Sexual Harassment at Workplace, with an Internal Complaints Committee in place; no cases were reported or pending in FY24. MCMIL holds OHSAS 18001:2007 certification for Occupational Health and Safety Management. Employee relations were reported as positive, with a workforce of approximately 282 personnel.
Governance Structure and Effectiveness #
As of March 31, 2024, MCMIL’s Board comprised eight Directors: four Executive Directors (including the Managing Director) and four Non-Executive Independent Directors (including the Chairman and one Woman Director). This composition adheres to the Companies Act, 2013, and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Key Board committees include the Audit Committee, Nomination & Remuneration Committee, Stakeholders’ Relationship Committee, and a Committee of Directors, with compositions and chairmanships generally meeting regulatory requirements. Changes in committee composition occurred during the year due to director resignations and appointments.
The company confirms that Independent Directors meet the stipulated independence criteria, have registered with the Independent Directors’ databank, and a separate meeting of Independent Directors was held. An annual performance evaluation of the Board, its committees, and individual Directors (including peer evaluation and evaluation of Non-Independent Directors and the Chairman by Independent Directors) was conducted.
MCMIL has adopted a Code of Conduct for Board Members and Senior Management, with affirmed compliance for FY24. A Whistle Blower Policy/Vigil Mechanism is established, providing direct access to the Audit Committee Chairperson. The company adheres to Secretarial Standards, and the Secretarial Audit Report for FY24 contained no qualifications. All related party transactions during the year were reported as conducted at arm’s length and in the ordinary course of business, with an RPT policy in place. No materially significant RPTs requiring AOC-2 disclosure were reported. Statutory Auditors (M/s. S. Bhalotia & Associates) are recommended for reappointment. Cost Auditors (M/s S. Chhaparia & Associates) were appointed, with remuneration ratification sought from shareholders. Internal Auditors for FY25 are S. K. Agrawal and Co. Chartered Accountants LLP.
Sustainability Investments and ROI #
While not explicitly termed “sustainability investments,” MCMIL has undertaken significant capital projects with environmental and operational efficiency benefits.
- CCL Capacity Enhancement (Completed April 2022): Upgraded from 39,000 MTPA to 86,000 MTPA (120% increase). This involved upgrading the electrical automation system and installing a new thermal incinerator for improved fuel efficiency. The ROI is increased production of high-value-added products and reduced fuel costs.
- Conversion of Galvanizing Line to Alu-Zinc Coating (Ongoing, expected completion FY 2025): This technological upgrade aims to produce a superior product (Alu-Zinc Coated Steel) offering enhanced durability (reportedly up to four times longer life) and commanding a market premium. The project is expected to increase the plant’s coated product capacity by 36%, to a total of 180,000 MTPA. The ROI is anticipated through higher-margin products, increased production capacity, and enhanced market competitiveness.
- New Cold Rolling Complex and Second Appliance-Grade Colour Coating Line (Planned): These projects are aimed at backward integration and further capacity enhancement, contributing to the overall coated product capacity target of 180,000 TPA.
These investments align with strategies to improve plant efficiencies, reduce operational costs, and increase the production of high-value-added products.
Regulatory Compliance and Future Preparations #
MCMIL reports compliance with key regulatory frameworks. The Corporate Governance Report confirms adherence to SEBI (LODR) Regulations, 2015 (specifically Regulations 17 to 27, 46, and Schedule V). Compliance with the Companies Act, 2013, and applicable Secretarial Standards is affirmed, with the Secretarial Audit Report for FY24 being free of qualifications. The Annual Return (MGT-7) for FY24 has been filed. The Directors’ Responsibility Statement asserts that applicable accounting standards were followed, adequate accounting records maintained, and internal financial controls are adequate and operating effectively. No significant adverse orders from regulators, courts, or tribunals impacting going concern status or future operations were reported for the year. No Corporate Insolvency Resolution Process was initiated or pending.
Future preparations are centered on strategic projects, notably the completion and commissioning of the Alu-Zinc coating line in FY 2025. This is expected to enhance product value, increase production capacity to 180,000 MTPA, and improve profitability. The company plans to continue its focus on value-added products like Pre-Painted Steel and leverage its strategic port access near Kutch for export growth. The Directors’ Report expresses an outlook of increasing revenue and profitability.
Future Projections and Guidance #
Financial Analysis Report: Manaksia Coated Metals & Industries Limited (FY 2024) #
Auditor’s Opinion and Qualifications #
Standalone Financial Statements #
The Statutory Auditors, M/s. S. Bhalotia & Associates, issued an unqualified opinion, stating that the standalone financial statements give a true and fair view of the state of affairs as of March 31, 2024, and of its profit, total comprehensive income, changes in equity, and cash flows for the year then ended, in conformity with Indian Accounting Standards (Ind AS).
Emphasis of Matter #
Attention was drawn to Note 44 regarding outstanding balances of trade receivables, interest receivable, trade payables, and loans & advances (given/taken) being subject to confirmation. This is not a qualification.
Key Audit Matters #
- Revenue Recognition: Due to the adoption of Ind AS 115, involving key judgments on performance obligations, transaction price, and revenue measurement.
- Capital Work-in-Progress (CWIP): Projects in progress and temporarily suspended amounting to Rs. 4,309.56 lacs (Note 3.1(a)), with Rs. 3,149.47 lacs suspended for over 3 years, pending capitalization.
Consolidated Financial Statements #
The Statutory Auditors issued an unqualified opinion, stating that the consolidated financial statements give a true and fair view of the consolidated state of affairs, profit, comprehensive income, changes in equity, and cash flows.
Emphasis of Matter #
Similar to standalone, attention was drawn to Note 44 regarding outstanding balances subject to confirmation.
Key Audit Matters #
Revenue Recognition (Ind AS 115).
Other Matters #
The auditors relied on the audit reports of other auditors for subsidiaries whose financial statements reflect total assets of Rs. 2,129.19 lacs and total revenue of Rs. 38.28 lacs for FY24. This is a standard disclosure and not a modification of the opinion on the Group’s financials.
Key Accounting Policies and Changes #
Basis of Preparation #
Financial statements are prepared under Ind AS, historical cost convention (except certain financial instruments at fair value), and on an accrual basis. The functional and presentation currency is Indian Rupees.
Revenue Recognition (Ind AS 115) #
Revenue is recognized when control of goods/services is transferred to the customer, measured at fair value of consideration, net of returns, discounts, and GST. Domestic sales recognized on dispatch; exports as per contract terms.
Property, Plant & Equipment (PPE) #
Stated at