Shivalik Bimetal Soars 3% on Block Deal

Block Deal Boosts Shivalik Bimetal’s Stock by 3%

On September 27, shares of Shivalik Bimetal Controls surged by 3% following a significant block deal worth Rs 500 crore. A total of 81.8 lakh shares changed hands at a floor price of Rs 611 per share, marking a slight discount of nearly 1% from the previous day’s closing price. While the buyers and sellers involved in this high-value transaction remain undisclosed, the market reaction was positive, signaling investor confidence in the stock.

Performance Snapshot: Revenue and Profit Decline in Q1 FY24

In the April-June quarter, Shivalik Bimetal’s revenue witnessed a marginal decline, slipping to Rs 125.98 crore compared to Rs 127.19 crore in the same period last year. The company’s profitability also took a hit, with net profit decreasing by over 16% to Rs 17.82 crore, down from Rs 21.28 crore in the previous year. This decline has contributed to a 21.27% negative return on the stock for 2024, although it has managed a 5% uptick in September alone.

Shivalik’s Unique Business Model and Long-Term Growth Potential

Shivalik Bimetal Controls, a highly specialized process and product engineering company, holds a unique position in the industry. The company manufactures and sells thermostatic bimetal and trimetal strips for various applications across sectors like electronics, automotive, medical, and defence. Additionally, it produces shunt resistors for the fast-growing automotive and industrial segments.

What sets Shivalik apart is its proprietary bimetal technologies, which cater to niche markets that require precision-engineered solutions. The company’s ability to serve industries with high entry barriers, such as electric vehicles (EVs) and smart metering systems, positions it well for future growth. Rising demand for battery management systems and switchgear further bolsters Shivalik’s long-term outlook.

Challenges and Opportunities Ahead

Despite facing near-term challenges in terms of revenue and profit decline, Shivalik Bimetal’s core strengths lie in its robust product portfolio and expanding market opportunities. The company’s strategic focus on sectors like electric vehicles and smart meters, both of which are expected to see significant growth in the coming years, should help the company recover and thrive.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.