Disclaimer – Analysis is NOT a BUY/SELL/HOLD Recommendation. It can be used for educational purposes. There can be lot of things which have been missed in analysis either due to lack of information or oversight etc.. Do your own diligence & contact your expert financial adviser before making any investment decision.

Inox India

Read Pick1, Pick2, Pick3, Pick4, Pick5, Pick6, Pick7, Pick8, Pick9, Pick10, Pick11

Business

Inox India is World’s leading provider of customized cryogenic equipment with Over 30 years of experience in design , manufacturing and installation of cryogenic equipment
Global customer base across 100+ countries
Large-scale serial manufacturing facilities at four locations in India and part manufacturing and service distribution from one location at Brazil with service distribution extending to Brazil and the Netherlands

Products, Segments and Strengths :

Income in different segments and Export : Domestic Contribution

Orders in different segments and Export : Domestic Contribution

Serving Industrial Gas, LNG and Cryo Scientific Division

Working continuously towards Clean Energy initiatives in – LNG, Liquid Hydrogen & Fusion Energy

Company has done good over years , some of the things mentioned below

• Completion of supply & installation of Cryogenic equipment’s for second launch pad project of ISRO
• Manufacturing, installation and commissioning of COMNAVAC thermal vacuum system for ISRO1
• Installation of mini-LNG terminal, in Scotland, UK
• Commissioning of LNG dispensing station in Dahej & CNG cascade filling facility in Nagpur
• MOU with a Japanese conglomerate for exploring opportunities in virtual LNG pipeline
• Completion of manufacturing of cryolines & warmlines for ITER2
• Awarded contract for setting up of mini-LNG terminal for Caribbean LNG Inc, West Indies
• Manufactured and delivered an MRI cryostat for a GOI project
• Ventured into manufacturing stainless steel kegs for varied applications including beverages
• Produced and shipped 238 KL & 311 KL Liquid Hydrogen Tank to a South Korean customer

Company has

• In-house technology, and engineering capabilities
• Strong Product Development & Engineering Focus
• Integrated Facilities in India and Service Support Internationally

Clients and Certifications

Professional Management team

Fundamental Ratios, Cash, Loans, EBITDA,PAT margin, Shareholding pattern

ROCE and ROE are at reasonably good levels

Debt to Equity is almost Nil

Promoter has skin in game.

Sales, OPM, Net profit has been on rising trend continuously, OPM stable above 20%

Cash conversion cycle needs to be monitored.

Working capital days are good

ALSO READ : Pick1, Pick2, Pick3, Pick4, Pick5, Pick6, Pick7, Pick8, Pick9, Pick10, Pick11

Recent Developments

Orders received for thermal shield repair, LCNG stations, Export orders as well in Q3FY24

Order Inflow was at ₹.295 Cr, up by 7% YoY
Company recorded highest revenue in Industrial Gas division of ₹. 214 Cr
As on 9MFY24, the Order Backlog was at ₹.1,043 Cr with 50% orders from Industrial Gas, 23% orders from LNG and balance 27% orders from Cryo Scientific Division and export order comprised of 47% of the Order Backlog

Capex

Company has incurred greenfield capex at Savli plant of ₹.100 Cr, entirely funded through internal accruals

Focus on LNG and Hydrogen

Agreements

ATGL and INOXCVA enter into a mutual support agreement to strengthen LNG ecosystem in the country
Both companies will accord a preferred partner status for delivery of LNG equipment and services

Memorandum of Understanding towards collaboration for the development of technology for the design and manufacture of SuperConducting Magnet based System for clinical, industrial, defense and research applications.

Patents

Company has received Patent Rights from Patents Office, Government of India titled: “A METHOD FOR SUSPENDING INNER VESSELS OF DEW AR TYPE CONTAINER TO STORE CRYOGENIC FLUID” bearing
Patent No. 530403

Company jointly with Institute for Plasma Research has received Patent Rights from Patents Office, Government of India titled “DISPLACEMENT DECOUPLING ARRANGEMENT FOR PIPING SYSTEMS” bearing Patent No. 502670

Company has received Patent Rights from Patents Office, Government of India titled:

1. ”A METHOD AND AN APPARATUS FOR DISPENSING LNG AS FUEL” bearing Patent No. 492614.
2. “SLIDING SPACER AND ITS ASSEMBLY TO SUPPORT THE INTERNAL CRYOGENIC PROCESS PIPE CRYOLINE” bearing Patent No. 503868

Valuations

Company is richly valued and at price of 1356 could be Fairly overvalued as well. Due to certain moat in business it is doing, it is commanding rich valuations while Earnings Growth is only around 25%.

Risks

High Cash conversion cycle due to inherent nature of business. It needs to be monitored closely

Rich valuations. One bad quarter can lead to correction in stock prices

Exports having a significant contribution in sales. Any disruption due to escalation of ongoing conflicts like China Taiwan or Israel Palestine, Iran can cause temporary issues

Exposure to intense competition in international markets: 

The  company operates in the capital goods sector, which is cyclical in nature and susceptible to international policies governing end-user industries, such as oil and gas and industrial gases. 

Technical Chart on 14Apr24

Survived well in last one month market correction and Recently made new highs. ANy correction towards 1250 zone, I would be tempted to add to my Position

Conclusion

If you have understood the triggers and industries it cater to + RISKS which can materialize and have patience then think of buying this company in every dip, market offers, else Ignore the stock

Also Read : ICEMAKE Refrigeration : Time to Chill

Disclaimer – Analysis is NOT a BUY/SELL/HOLD Recommendation. It can be used for educational purposes. There can be lot of things which have been missed in analysis either due to lack of information or oversight etc.. Do your own diligence & contact your expert financial adviser before making any investment decision.

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