Automobiles and Consumer durables sectors and the also trades in cable accessories including various types of cables and their accessories widely used in automotive, telecom infrastructure, instrumentation etc. and also deals in manufacturing various copper conductors.
The company is one of the leading manufacturers of RF cables in the country and they are actively promoting aluminum-based RF coaxial cables. Besides it is cost-efficient compared to copper cables while at the same time, the technical parameters are comparable to any other copper cable.
Shilpi does business mainly in the following sectors:
RF CABLE MARKET
As a consequence of an explosion of mobile device usage, subscribers expect more services, data, capacity and speedier networks – whether they’re outside or inside.
As a result, addressing the coverage, quality and capacity requirements of In Building users is mandatory. Thus IBS is going
to be critical in the coming months especially with the launch of LTE/4G services. IBS providers mainly use ½” and 7/8” RF
cable along with related accessories . Thus there will be a large requirement for these this type of cable in the coming months
The automotive industry in India is one of the largest in the world and one of the fastest growing globally. India’s passenger car and commercial vehicle manufacturing industry is the sixth largest in the world. According to recent reports, India is set to overtake Brazil to become the sixth largest passenger vehicle producer in the world.
BUNCHED COPPER WIRE
The totalrequirements of bare copper wire/bunched copper wire is around 6 lakh M.T. per annum. Out of which,the organized sector requirement is around 3.5 Lakh M.T. and the unorganized sector accounts for around 2.5 Lakh M.T
WHITE GOODS INDUSTRY
The white goods industry plays a key role in Electrical appliances such as Washing machines, refrigerators, Microwave ovens, ironing machines and even air conditioners are considered as white goods. Shilpi believes there is a business potential of around Rs. 800~1000 crs for wire and cable industry in India in this segment.
The industry is very competitive and there is also a foreign exchange risk, as the company exports some of it's products and doesn't hedge the transactions. Let's look at financials:
The most interesting about the company is it's valuation. Assuming 25% profit growth for the next 5 years, then 12.5% for years 5-10 and 2% terminal growth rate, I get the following value: