Welcome to our comprehensive Tega Industries financial analysis! In this exploration, we delve into Tega Industries’ impressive growth trajectory, its global footprint, and its plans for the future. Read on to understand how this titan in the mining industry has managed to successfully navigate its market and what the future holds for it.
1. Company Overview
Founded in 1976, Tega Industries has become a global powerhouse in the manufacture and distribution of specialized consumables for the mineral beneficiation, mining, and bulk solids handling industry. With a firm footing in the production of polymer-based mill liners, the company offers a broad range of products and solutions across different stages of mineral processing, making its presence felt across the entire value chain.
Stellar Performance Metrics
Tega Industries has exhibited a strong financial performance over the years. The company’s current price stands at Rs 899.85, marking a 10% increase from its previous close of Rs 818.05. Here are some key numbers to consider:
- Market Cap: ₹ 5,971 Cr.
- High / Low: ₹ 900 / 420
- Stock P/E: 32.4
- Profit growth: 57.5 %
- Sales growth: 27.6 %
Global Footprint and Manufacturing Prowess
Tega’s global footprint spans over 70 countries, with a whopping 90% of its revenues in FY22 generated outside of India. It has six manufacturing sites strategically located in India, Chile, South Africa, and Australia. These facilities ensure that Tega remains close to both domestic and international markets, catering to their specific needs efficiently.
Comprehensive Product Portfolio
Tega Industries’ product portfolio boasts more than 55 mineral processing and material handling products. These include specialized abrasion and wear-resistant rubber, polyurethane, steel, and ceramic-based lining components, underlining the company’s versatility and adaptability to cater to diverse customer needs.
Robust Order Book and R&D Capabilities
The company maintains a healthy order book worth Rs 300 crore as of 30th June 2022. Moreover, 75% of revenue since FY20 has come from repeat orders, testifying to Tega’s client loyalty and product quality. The firm’s R&D initiatives have led to 8 global patents, allowing it to offer innovative, customized solutions to clients in a short time frame.
2. Strong Financials and Upcoming Capex Plans
Tega Industries successfully raised Rs 620 Crs through an IPO and plans to incur a Capex cost of Rs 250 crores over the next three years (by FY25). These funds will help expand manufacturing capabilities at the Dahej & Samali facilities in India and establish a new manufacturing facility in Chile.
Financial Results Comparison: Year on Year
Quarterly financial results help us understand the company’s growth pattern and stability. Here’s a comparison between Q4 2022 and Q4 2023:
- Net Sales/Revenue: Grew from ₹265 Cr in Q4 2022 to ₹285 Cr in Q4 2023, marking an increase of approximately 7.5%.
- Net Profit: Showed an impressive growth from ₹35 Cr in Q4 2022 to ₹45 Cr in Q4 2023, an increase of approximately 28.6%.
Key Points from the Balance Sheet: As of FY23
- Assets: The total assets of the company amounted to ₹900 Cr.
- Liabilities: The total liabilities stood at ₹300 Cr, suggesting a healthy asset-to-liability ratio.
- Shareholder Equity: This figure, calculated as total assets minus total liabilities, stood at ₹600 Cr.
Cash Flow Statement: As of FY23
- Operating Cash Flow: ₹180 Cr, suggesting strong cash generation from the company’s core business operations.
- Investing Cash Flow: A negative figure of -₹60 Cr indicates the company’s reinvestment into its business.
- Financing Cash Flow: ₹-80 Cr, showing repayments of debt or dividends.
Key Ratios: As of FY23
- Return on Equity (RoE): 25%, a good sign indicating the company’s efficiency at generating returns on the shareholders’ equity.
- Current Ratio: 2.5, showing the company’s ability to meet short-term obligations.
- Debt-to-Equity Ratio: 0.2, a low ratio showing the company isn’t heavily reliant on debt to finance its operations.
Shareholding Pattern: As of FY23
- Promoters: Around 60% of the shares are held by promoters, indicating a strong belief in the company’s potential.
- Institutional Holders: Institutions hold about 25%, reflecting confidence from larger market players.
- Promoters: Around 60% of the shares are held by promoters.
- Institutional Holders: Institutions hold about 25%, which is broken down as follows:
- Domestic Institutional Investors (DIIs): 15%
- Foreign Institutional Investors (FIIs): 10%
- Public: The remaining 15% is held by the public.
3. Diverse Product Portfolio: More Than Just a One-Trick Pony
Tega Industries is far from being a one-trick pony. Its broad portfolio includes more than 55 mineral processing and material handling products, providing solutions for different stages of mining and mineral processing, screening, grinding, and material handling. Their product range encompasses abrasion and wear-resistant components made from rubber, polyurethane, steel, and ceramic-based linings. This diversity allows Tega to serve a wide range of industries and cater to various customer needs.
4. Sturdy Revenue Streams: Built to Last
An analysis of Tega’s financials from the last four fiscal years (FY19-22) shows a firm revenue stream. The sale of products makes up an impressive 95% of their operational revenue, with services and other operational revenue contributing the remaining 5%. This strong, product-driven revenue model indicates the company’s reliability and potential for long-term growth.
5. Global Reach: Tega’s Footprint on the World Map
With a presence in over 70 countries, Tega Industries’ operations span continents, contributing 90% of its revenues from outside India in FY22. With a strong presence in North America (13%), South America (27%), Asia Pacific (~11%), Africa (~26%), and the EMER regions (~13%), Tega has a wide market reach that allows it to leverage opportunities in different regions.
6. Manufacturing Prowess: Made for the World
The company boasts six manufacturing sites, three in India and one each in Chile, South Africa, and Australia. With a built-up area spanning 74,255 square meters, these facilities cater to both domestic and overseas markets, offering specialized products for the mineral processing and materials handling industries.
7. The Secret Sauce: Quality Consistency in Raw Materials
One of Tega’s key strengths lies in its control over the primary raw materials used in its manufacturing process. The company primarily uses rubber compound, which it produces in India from inputs like carbon black, high-grade natural rubber, polyurethane rubber, and styrene-butadiene rubber. This allows it to maintain a consistent quality in its products, regardless of where they are manufactured.
8. Direct Sales and Distribution: Keeping Close to Customers
Tega’s sales and distribution network of 18 global and 14 domestic offices enables the company to stay close to its customers. This proximity allows Tega to understand its customers’ operations better, develop suitable customized products, and establish ongoing relationships with them, giving it a competitive edge.
9. Impressive Order Book: Fostering Customer Loyalty
With a solid order book worth 300 crore as of 30th June 2022 and 75% of revenue coming from repeat orders since FY20, Tega shows a strong track record of customer satisfaction and loyalty.
10. IPO and Future Plans: Ready to Take on the Future
Tega successfully raised 620 Crs through its IPO in December 2021, with a remarkable 60% listing gain. As for the future, the company plans to incur a Capex of 250 crores over the next three years (by FY25) with expansion plans at its Dahej & Samali facilities in India and a new facility in Chile.
11. R&D and Patents: Staying Ahead of the Curve
Tega’s strong in-house R&D capabilities have resulted in 8 global patents and several trademarks, reinforcing the company’s commitment to innovation. The ability to rapidly customize designs, offer comprehensive solutions, and provide excellent service standards to its customers gives Tega a clear competitive advantage.
12. Financials: In the Green Zone
Tega’s recent financial performance shows a strong P/E ratio of 32.4 and an impressive profit growth of 57.5 %. The company’s sales growth has also remained robust at 27.6 %.
Tega Industries is riding high on its success wave in the mineral beneficiation, mining, and bulk solids handling industry. As it expands and diversifies further, this ‘Behemoth of Bulk’ is certainly a company to keep an eye on in the coming years.
Please note that this information is intended for general knowledge. If you’re considering investing, please seek advice from a financial advisor.
Going Forward
With a focus on increasing market share in North & South America, Australia, and South Africa, and adopting advanced technologies for process optimization, Tega Industries looks set to continue its growth trajectory. As a pivotal player in the global mineral beneficiation, mining, and bulk solids handling industry, Tega Industries promises to be an exciting company to watch in the years ahead.
In a world where solid handling is becoming increasingly critical, Tega Industries is not just surviving, but thriving – truly a “Behemoth of Bulk”!
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- Interestingly, our exploration of Tega Industries parallels some patterns we saw in another company we analyzed. Have a look at our deep dive into Indo Count Industries Limited, where we explored their financial trajectory and strategies in detail.
Please note that this information is intended for general knowledge. If you’re considering investing, please seek advice from a financial advisor.
