Glass-lining is a specialized coating of glass, which is applied on the chemical reactor vessels/ equipment. Glass-lined equipment are used for preventing corrosion caused by reactions of corrosive chemicals by the Pharmaceuticals, Agrochemical and other Chemical Industries. The Glass Lining Industry has gone through tremendous changes during the last two decades. The core element of the Glass Lining Industry lies in the technology used for manufacturing of glass frit and its applications/ lining on the vessels/ equipment.

The company specializes in design and manufacturing of Carbon Steel Glass Lined Equipment viz. Reactors, Receivers / Storage Tanks, Driers, Filters, Columns, Agitators, Valves, Pipes & Fittings. It caters to requirement of leading Pharmaceutical / API, Specialty Chemicals, Dies / Colors, Agro Chemicals, Food Processing and allied Industries.

Glass Lined Equipments are manufactured to the highest Quality Standards of workmanship and material. The Reactors are generally as per DIN 28136 standard and manufactured in accordance with ASME Code for unfired Pressure Vessel, Section VIII Division I. All Clamps and Flanges Comply with ANSI / DIN Standard, Equipment are also specially designed and constructed to the client's own specifications.

The company's equipment has a high brand recall amongst its existing customers as well as generally in the Industry.

The company is a one-point solution-provider

By consolidating quality, performance, engineering design, service and much more, Swiss Glascoat has established itself as One-Point Solution-Provider for glass-lined products of any type, size, output including a complete range of accessories. Today, with the support of its customers, the company is ahead of the curve in terms of technology, processes and people in this exciting segment.

June 2019 quarter financial performance

In quarter ended June 2019, sales grew 42% to Rs 39.89 crore. OPM improved 90 basis points to 11.8% which saw OP grow 54% to Rs 4.72 crore.

Other income fell from Rs 15 lakh to Rs 11 lakh and interest cost went up 32% to Rs 56 lakh. As depreciation grew 9% to Rs 83 lakh, PBT grew 68% to Rs 3.43 crore. After providing for taxation, (up 29% to Rs 72 lakh- tax incidence fell from 27.5% to 21.0%), PAT grew 83% to Rs 2.71 crore.

FY 2019 results

In FY 2019 sales grew 19% to Rs 96.65 crore. OPM fell 120 basis points to 10.6% which saw OP rise 6% to Rs 10.21 crore.

Other income jumped from Rs 26 lakh to Rs 1.01 crore and interest cost went down 45% to Rs 1.44 crore. As depreciation grew 19% to Rs 3.04 crore, PBT grew 43% to Rs 6.75 crore. Tax fell 14% to Rs 1.39 crore (tax incidence fell from 34.0% to 20.6%) after which PAT rose 72% to Rs 5.36 crore.

Healthy outlook

The various Government and Reserve Bank initiatives like 100% FDI in the Pharmaceuticals sector under automatic route, reduction in the interest rates, etc. is already providing opportunities to expand the company's business.

In the recent past the company has witnessed lot of activity to participate in the capex program of many of its existing and potential customers, from the pharma and agrochemical/ specialty chemical sectors, which had earlier slowed down.

The company's philosophy to provide the best quality at a competitive price, continuously innovating its existing processes and introducing new technologies (automation and process improvement) will give lot of thrust and impetus to its operations and order book.

Almost all the major Indian glass lined equipment end users have used and are satisfied with its products. Now, the company has intensified its marketing efforts and service network to strengthen its domestic and global presence and is receiving positive, encouraging response.

With production of many chemical and chemical products shifting from China to India due to more stringent pollution control norms in China, lot of capex is happening in India in chemical industry which is benefiting SGEL.

Valuation

The stock trades at Rs 180.