Friday, June 11, 2021

Magna Electro Castings Limited - Transforming For The Future

 


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.


The company also adds value by heat treatment, surface treatments and machining so that the products are ready to assemble. This Company also produces fully machined components, utilizing its in-house CNC machine shop and other facilities as well. The Company has developed 118 new products which includes proto parts and other regular parts. Further to that the Company expects to derive benefit from such new developments in forthcoming years.

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. 




Friday, June 4, 2021

Update on Next Stock


Dear Blog Members,



I hope all of you are safe and healthy along with your family. 

Last few months were very challenging for us due to devastating impact of second wave of the Covid-19. Now  it has started flattening in the country  and showing signs of recovery and hope.

We expect fast recovery of economy and all business sectors in coming quarters. We will go for next  stock in the coming weekend and it will be posted on this blog  on 11 June 2021 (Friday  after market hours).