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| CMP = 157 |
Magna Electro Castings Limited was incorporated as a public limited company in 1995. Magna is specialized in the manufacturing of castings and machined components of ductile iron, grey iron, spheroidal graphite iron, iron alloys, castings-machined, unmachined and steel components. It manufacture the castings in the weight range of 300 grams to 2000 kilograms. Magna also adds value by heat treatment, surface treatments and machining so that the products are ready to assemble.
It caters to various end-user industries like auto components, railways, agro, tractors, textile, refrigeration, turbo chargers, printing, hydraulics, cement , electrical machinery, earth moving machinery, power equipment, defense equipment, valve, windmills, transmission, etc.
Corporate Video
https://www.youtube.com/watch?v=6lG0k49TzXc
Manufacturing Facilities
The company has state-of-the-art factory with built in area of 25000 sqm ( 6.1 acre). As part of the green initiative of clean energy the company has installed wind mills with aggregate capacity of 4 MW for captive consumption purposes and the power generated from the wind mills feeds more than 60% of the power requirement of the company.
Casting Facilities
Magna has best in industry casting facilities include pattern-making, sand plant, coreshop, melting, green sand moulding, furan fast loop line , heat treatment, and fetting facilities.
Machining Facilities
Machining Facilities has modern hi-tech CNC machines capacity of 24 CNC machines include Horizontal Machining Centers, Vertical Milling Centers and Vertical and Horizontal Lathes. Machine Shop has Robust Fixture design capabilities using 'Solidworks' software and is backed up with 'EdgeCAM' software capable of programming Milling, Turning and Mill-Turn machines to eliminate manual error in CNC Programming.
Process Facilities
Magna has accredited metallurgical laboratory, non-destructive testing and metrology departments have facilities to carry out OES, combustion and gas fusion chemical analysis, hardness testing, microstructural examination, sand testing, radiography, dye penetrant, magnetic particle, ultrasonic inspection, Fully Automatic Brown & Sharpe CMM and laser scanning.
Development Capabilities
Magna is using the best technologies available, paired with tried and true foundry practices to create tooling and process techniques that reliably and consistently meet the casting needs of customers.
Quality Management
Magna has all inhouse testing facilities to ensure the alloy performance properties are to the specifications of the customer. Casting alloys are typically specified as per ASTM, AMS and SAE alloy specifications. Magana is certified for ISO 14001:2015 and IATF 16949:2016 certification by Bureau Veritas. Pressure Equipment Directive standards 2014/68/EU and Marine Certificate under DNV GL Rules for Classification of Ships. It ensure the high quality assurance that meet or exceeded all contractual requirements of products.
Investment Rationale
Indian foundry sector is lagging far behind in adopting the efficient and productive technology. From last few years, Magna is adopting the latest technology at decent pace to modernising its casting division such as 3D sand printing and use of robotics. 3D printing technology enable to print the mold and cores within days and deliver the prototype casting within weeks. It completely eliminate the old lengthy process of mold making. The company has installed robotic machines to perform several critical operations to eliminate the human error and improve the product quality.
https://www.magnacast.com/news.php
Magna Electro is utilizing the Engineering Services capability and the leading edge 3D printing technology of its sister company Magna Digitech to leverage New Product Development for its customers. This one of a kind unique selling proposition (USP) puts Magna in an enviable position to provide solutions to its customers right from the Design Stage to Engineering to Prototyping to Validation and to Production lots to its customers. Magna aims to become the Go To supplier for Casting Technology.
Magna Digitech is aiming to modernise the entire Indian Foundry & Casting Industry.
https://www.amchronicle.com/insights/magna-digitech-strides-in-modernising-the-foundry-casting-industry/
https://www.youtube.com/watch?v=6GumWWQY4Tw
Over the last 25 years company has built a solid knowledge background and pool of extensive experienced people. It enables the company to meet stringent requirements on quality control for complex jobs. Now company is coupling experience of past with fast-emerging technology of the future.
Export of casting products from India is very insignificant as compared to the global industry demand. Hence the opportunity is there for the company to tap the export market. The foundry products are used in its sustainable growth has become more important today than ever before given the emphasis of the government on 'Make in India'. The company is already doing around 50% of its business from export, it supplies industrial components to the leading OEM across the world.
Magna has established warehousing in the USA, this facility along with bi-weekly container shipments, allows the company to cater to low volume requirements. The warehousing capability enables it to supply products just in time to the customers in USA and Europe.
Magna is accredited with different international standard specified as per ASTM, AMS and SAE alloy specifications. Magana is certified for ISO 14001:2015 and IATF 16949:2016 and 2014/68/EU. All these increases opportunity for getting orders from across the world from different industry.
Mr. Krishna Samraj is the managing director of Magna Electro Castings Ltd. He is also ex-president for Institute of Indian Foundrymen (apex body for foundry in India). Promoters have raised their stake 20% in last 10 years. Shareholding of promoters has increased from 32.41 % in 2011 to 52.58% in 2021.
You will get some insight about vision and personality of company MD Mr. Krishna Samraj, even though it is eight year old interview.
https://www.youtube.com/watch?v=Ulz9A3BW2vA
Magna Electro has gone for buyback offer @ Rs 175 per share in Oct-Nov 2020. Company is debt free and paying regular dividend since last 15 years.
Conclusion
Magna Electro Casting has well established state-of-the-art infrastructure and cutting-edge technology. The company is continuously upgrading its facilities with latest technology since last 3 years. From last two years industrial growth is subdued due to Covid-19 impact in India and across the world but now all the stage is set to reap the benefit of these investments. The company is going to give robust growth in the coming quarters. Stock at cmp 157 is giving best investment opportunity in this segment for both mid term and long term ( 2 year to 5 years ). It can be bought + / - 15% from cmp with 10 % allocation.
