MODISON METALS LTD (506261) - STOCK OF THE WEEK

Dear Investor friends, Today I am expressing my view on  one Electrical metal component manufacturing company.

MODISON METALS LTD (506261)

MODISON is the only company globally manufacturing electrical contact materials and finished contacts for low, medium and high tension switchgear industry under one roof starting from Silver Refining to producing all the contact materials.

MODISON was founded in 1965, to deal in tool steels and export of engineering and general merchandise.

A decade later in 1975, company established the first manufacturing facility in Mumbai basically for refining of silver. Later  it started exporting large quantities of refined silver to renowned bankers and dealers in Europe and U.S.A. MODISON was instrumental in establishing ‘999’ Good Delivery Silver Bars in India for bullion trading.

Within a couple of  years after starting silver refining, the company’s management realized the vast potential for Electrical Contacts and Contact Materials for switchgear industry and thus facilities were added to manufacture silver and silver alloy wires, plates, strips and solid/ bitmetal contacts.

This was the beginning of MODISON’s contacts manufacturing at Mumbai. The company soon made necessary manufacturing to cater to the market needs. Company is having  technical collaboration with DODUCO KG, Pforzheim, Germany, in 1983, the world’s leading manufacturer of contact materials.

Modison is having two manufacturing facilities at Vapi and Silvassa. MODISON is the only company globally manufacturing electrical contact materials and finished contacts for low, medium and high tension switchgear industry under one roof starting from Silver Refining to producing all the contact materials. 

PRODUCTS

Modison manufactures following main products.

Low voltage Electrical Contacts

Medium & High Voltage Electrical Contacts

Precious metal compounds

Silver Bullion for Gifts & Investments

Services for Refining of Precious metals

Low Voltage Contacts

Modison manufactures number of different low voltage contacts, mainly from Bimetals and refined silver.

BI-METAL, as the name implies, is a combination of two metals – a precious contact metal bonded to a suitable backing metal. Bi-metals are designed to effect economy by way of reduction in use of precious metals like Silver. Generally, Silver or an alloy of Silver forms the contact material while Copper/ Brass aee the most commonly used Backing materials. The bond between contacts and Backing materials is mechanically and thermally sound.

Medium & High Voltage Electrical Contacts

For High & medium voltage contacts, company manufactures number of products for Switchgear applicaions.

Modison offers Silver Copper - Eutectic Brazing Alloys for high temperature brazing for Vacuum applications.

These alloys are manufactured using State of the Art Vacuum Melting Furnace and can be supplied in the form of Wire Rings, Washers, Shims Foils, special shapes.

Precious metal compounds

Modison mainly manufactures following Precious metal compounds.

Silver Nitrate

Silver oxide

Silver Sulphate

Silver Bullion for Gifts & Investments

These are the add-on products for companys portfolio. Different weights of Silver bars and coins are being manufactured. This will be for gift and for investment purposes. MODISON manufactures custom made shapes of these products, these are being manufactured from refining the metals hence purity of the metals are restored.

Services for Refining of Precious metals

Company is having following services also in the fiield of precious metals.

Refining and Recovery of Precious Metals

Melting and Assaying of Silver

Silver Plating

R&D Development of Contact materials for special applications

Electron Beam Welding

Company website: Clickhere

FINANCIALS AND OUTLOOK

Company shares are trading in BSE. Promoter holding in company 51.65%

Company posted 54.29 Cr top line in March qtr.

Net profit is 2.6 Cr in the March qtr.

Company pasted 190.7 Cr Top line on yearly basis as compared to 168.1 Cr previous year (13.4 % increase YOY basis) - consolidated

Profit has jumped to 14.08 Cr from 10.8 Cr (30.3 % increase YOY basis) - consolidated

Stock is trading low PE as compared to its peers.

EPS 4.34

Debt to Equity is 0.2

Regular dividend paying company

Stock is trading at Rs 60.

Company has posted good set of Numbers. Company is trading PE is low as compared to its peers and reducing trend of debt.

Company’s products are unique and having huge demand in Domestic as well as international markets. As the products are widely used in Electrical switchgear and related industries which is growing much faster than other Electrical related industries which is a huge positive for the stock. This stock will give multiple fold returns to the investors in a days to come.

NOTE : THE ABOVE IS NOT A RESEARCH REPORT NOR A RECOMMENDATION  BUT INFORMATION AS AVAILABLE ON PUBLIC DOMAIN. 

Registration status with SEBI: I am not registered with SEBI under the (Research Analyst) regulations 2014 and as per clarifications provided by SEBI: “Any person who makes recommendation or offers an opinion concerning securities or public offers only through public media is not required to obtain registration as research analyst under RA Regulations”