Gallantt Metal

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Gallantt Metal

Gallantt, who?

Blog: http://dharmawat.blogspot.com/

Niteen S Dharmawat

http://dharmawat.blogspot.com/

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IMPORTANT DISCLAIMER: This presentation is prepared solely to provide information about this

company and take feedback from the readers. This presentation is NOT meant for equity

investment. It should NOT be construed as an investment advice for buy/sell/hold or any other

form of recommendation. This presentation does not recommend any price or price target for

the company discussed. Investment in equity shares has its own risks. The information contained

herein is based on my study and upon sources that I consider reliable. I, however, do not vouch

for the accuracy or the completeness thereof. This material is for personal information and not

intended for any investment decisions. I am not responsible for any profit or loss incurred based

upon it & take no responsibility whatsoever for any financial profits or loss which may arise from

the discussion thread above/anywhere in communication. It is safe to assume that I, my family,

friends have vested interest in any of the companies/stocks discussed/presented here. Please do

your due diligence and take the help of a qualified advisor/registered research analyst before you

take any financial decision. I am neither of these.

About Gallantt Metal

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Background…

They manufacture TMT bars

Not in the radar of any research house

It is a low debt (now negligible debt)

Promoters increased stake

Plant in the Kutch area close to ports and the consumer market of Gujarat, Raj, MH and MP.



About Gallantt Metal

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Background…

CMP: ~39 (52Wk H: 43.70, L: 22.10). Listed in NSE/BSE

Market cap is 316Cr

Revenue 700Cr

ROE/ROCE both in double digits

Good Operating Cash Flow



Management actions: Debt

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Gallantt Metal management on debt management


Rs. 190 crore loan taken from SBI

and other consortium

member banks

To be repaid in 2016 but repaid entire loan well

in advance in 2014

Debt free except for the

working capital

17% pledged holding, of total

shares, also released

India Ratings (Fitch company)Short Term Ratings: IND A2+ / Long Term Ratings: IND A-


Promoters Stake chart

6Blog: http://dharmawat.blogspot.com/

Parameter Jun2016

Mar2016

Dec 2015

Sep2015

Jun2015

Mar2015

Total Promoters’ SHP

63.69% 58.93% 54.61% 54.62% 54.62% 54.62%

UnpledgedPromoters’ SHP

63.06% 40.28% 35.96% 35.98% 35.98% 35.98%

Signal•Healthy promoters’ holding•Pledged removed•Promoters holding increasing


Management actions: capacity expansion

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Gallantt Metal management on capacity expansion

Already taken an expansion plan, with an investment of approx. Rs.100 crores

The majority of this expansion is also completed and the rest shall be completed by

September 2016

Increase the capacity of

Sponge Iron: 28%

Steel Melt: 48%

TMT: 53% and

Captive power plant capacity: 32%

(from 25MW to 33MW)



Management actions: capacity expansion

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Gallantt Metal management on capacity expansion


Products Existing Capacity Addition TOTAL

Sponge Iron 1,75,500 48,900 2,24,400

Steel Melt Shop 1,78,200 85,800 2,64,000

Rolling Mill 1,71,963 92,037 2,64,000

Captive Power Plant 25MW 8MW 33MW

Capacity in MTPA


Gallantt Metal Audit & Remuneration Committee


All the members of Audit and Remuneration

Committees are independent directors

Mr. Jyotirindra Nath DeyNon-Executive Independent DirectorMr. Prasant KankraniaNon-Executive Independent DirectorMs. Richa BhartiaNon-Executive Independent Director


Icing on the cake

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Background…

Gallantt Metal holding 26% of Gallantt Ispat.

Holding value around 430cr as on 22nd July 2016

33mw power plants => 198crs (1mw=6cr)



Gallantt Metal Performance

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Numbers…


Parameter Mar 2010 Mar 2011 Mar 2012 Mar 2013 Mar 2014 Mar 2015

Sales 433.12 556.68 585.32 742.76 669.01 720.33

Operating Profit

63.57 47.95 43.99 54.82 44.26 63.63

OPM 14.68 8.61 7.52 7.38 6.62 8.83

Net Profit 23.55 22.92 14.54 31.75 15.06 33.95

EPS (unadj) 2.90 2.82 1.79 3.90 1.85 4.17

OCF 28.06 46.93 25.01 84.37 -43.00 69.55

TTM Net Profit: 41.58 Crores

Numbers in Crores


Risks and Mitigation


The company does not pay any dividend.

Gallantt Metal was undergoing some expansion

A new project at Hospet, Karnataka is under detailed planning and 100 acres land has already been procured

Low tax around 7-8%. Possibly two reasons

MAT benefits?

Steel business makes loss while the power generation division which is tax exempt makes profit



About the presenter:

Niteen is an MBA and cleared CFA Level 2, CFA Institute USA. A firm believer in long-term financial planning, and a 20 years veteran of the stock market. He also conducts free investor awareness sessions.

He likes reading books/magazines/news papers on the topics as diverse as general management, technology, investment, fiction, marketing and the Gita.

He is a person who believes in "Everything else can stop but learning".


Thank you

Email: [email protected]

Mobile: 9850571857


Twitter: @niteen_india

Slideshare: www.slideshare.net/ndharmawat/

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mailto:[email protected]


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15

IMPORTANT DISCLAIMER: This presentation is prepared solely to provide information about this

company and take feedback from the readers. This presentation is NOT meant for equity

investment. It should NOT be construed as an investment advice for buy/sell/hold or any other

form of recommendation. This presentation does not recommend any price or price target for

the company discussed. Investment in equity shares has its own risks. The information contained

herein is based on my study and upon sources that I consider reliable. I, however, do not vouch

for the accuracy or the completeness thereof. This material is for personal information and not

intended for any investment decisions. I am not responsible for any profit or loss incurred based

upon it & take no responsibility whatsoever for any financial profits or loss which may arise from

the discussion thread above/anywhere in communication. It is safe to assume that I, my family,

friends have vested interest in any of the companies/stocks discussed/presented here. Please do

your due diligence and take the help of a qualified advisor/registered research analyst before you

take any financial decision. I am neither of these.

Gallantt Metal

Business