Shivalic Power Control Ltd was listed on the NSE SME Index recently at a premium of 211% on July 1st, 2024. Since then, it has had a bittersweet journey on the stock exchange. Nevertheless, it is still trading in the overvalued zone but enthusiastic investors can consider taking positions in the stock once it comes at attractive valuations if a correction ensues on the back of a less-than-spectacular budget.
Introduction
Shivalic Power Control Ltd. is a leading manufacturer of electrical control systems in India. Established in 2004, the company is committed to ensuring seamless industrial operations and enhanced equipment safety. They offer a wide range of products and services, including electrical panels, power distribution systems, and automation solutions.
They have a state-of-the-art manufacturing facility in Faridabad, Haryana.
What does the company do?
They specialize in the design, engineering, and production of a wide range of electrical panels and power distribution solutions. These products are crucial for ensuring the safe and efficient operation of electrical equipment in various industries.
- Electrical Panels: Shivalic manufactures various types of electrical panels, including PCC panels, MCC panels, APFC panels, and more. These panels are used to control and distribute power in industrial settings, commercial buildings, and infrastructure projects.
- Power Distribution: They receive the incoming electrical power and divide it into smaller circuits, each serving a specific area or appliance. This ensures that electricity is delivered safely and efficiently throughout the building.
- Circuit Protection: Electrical panels house circuit breakers or fuses that protect each circuit from overloads or short circuits. These safety devices automatically shut off the power to a specific circuit if it detects an abnormality, preventing electrical fires and damage to equipment.
- Main Disconnection: They provide a main switch or breaker that can be used to shut off the entire electrical supply to the building in case of emergency or maintenance work.
- Power Distribution Systems: The company also offers complete power distribution solutions, including transformers, switchgear, and bus ducts (a bus duct is essentially a metal enclosure (often made of aluminum or steel) that contains conductive bars (busbars) made of copper or aluminum. These busbars are insulated from each other and the enclosure, allowing for the safe transmission of high electrical currents, they are used because they have less resistance and take up less space). These systems are designed to ensure reliable power delivery and efficient energy management.
Key functions of switchgear:- Control: Switchgear allows operators to manually or automatically control the flow of electricity in a circuit, enabling them to start, stop, or regulate the operation of electrical equipment.
- Protection: It provides protection to electrical equipment by automatically interrupting the flow of electricity in the event of a fault, such as an overload or short circuit. This prevents damage to the equipment and ensures the safety of personnel.
- Isolation: Switchgear can be used to isolate a section of the electrical system for maintenance or repair work. This ensures the safety of workers by preventing accidental energization of the equipment.
- Tap Changers: These are used in transformers (which are often part of a switchgear system) to adjust the voltage levels. By changing the number of turns in the transformer’s windings, the tap changer can increase or decrease the voltage output, effectively regulating the intensity of the electrical flow.
- Services: In addition to their products, Shivalic also offers a range of services, including installation, commissioning, testing, and maintenance of electrical systems.
Is the industry poised for growth?
The electrical control systems industry, including companies like Shivalic Power Control Ltd., is indeed poised for significant growth in the coming years. Several factors contribute to this positive outlook:
- Increasing Industrialization and Urbanization: The rapid growth of industries and urban areas worldwide drives the demand for reliable and efficient electrical infrastructure, including control systems. This demand is expected to increase further as countries continue to develop and modernize.
- Renewable Energy Adoption: The global shift towards renewable energy sources like solar and wind power necessitates sophisticated electrical control systems to manage the integration of these intermittent sources into the grid. Companies like Shivalic are well-positioned to capitalize on this trend.
- Energy Efficiency Initiatives: Governments and businesses are increasingly focusing on energy efficiency to reduce costs and environmental impact. Electrical control systems play a vital role in optimizing energy consumption in buildings, industrial processes, and infrastructure, making them a key component of energy-saving strategies.
- Technological Advancements: The continuous evolution of technology, such as the Internet of Things (IoT) and artificial intelligence (AI), is leading to the development of smarter and more efficient electrical control systems. These advancements create new opportunities for companies in this industry.
Market Projections:
Various market research reports support the growth projection of the electrical control systems industry. For example:
- MarketsandMarkets predicts the global power plant control system market to grow at a CAGR of 7.3% from 2021 to 2026.
- Allied Market Research projects the global power plant control system market to reach $10.4 billion by 2030, growing at a CAGR of 3.6% from 2021 to 2030.
- Research Nester anticipates the electric control panel market to reach USD 13.73 Billion by the end of 2036, registering around 6.1% CAGR during the forecast period i.e., between 2024-2036.
Conclusion:
Considering these factors and market projections, it’s evident that the electrical control systems industry, and companies like Shivalic Power Control Ltd., are poised for substantial growth. The increasing demand for reliable, efficient, and intelligent electrical systems, coupled with technological advancements and favorable government policies, creates a promising future for this sector.
What are the competitive advantages enjoyed by the company?
Strong Partnerships: Shivalic has established exclusive partnerships with industry giants like Siemens, L&T, Schneider Electric, and TDK. Customized Solutions: The company is known for its ability to provide customized solutions tailored to the specific requirements of its clients.
Does the company export its products?
- Asia: Mongolia, Nepal, Thailand, Sri Lanka, Bangladesh, Afghanistan
- Africa: Nigeria, Kenya, Sudan, Uganda, South Africa, Algeria
What are the risks associated?
Supply Chain Disruptions: The company relies on a network of suppliers for raw materials and components. Any disruptions in the supply chain, such as delays, shortages, or price increases, could impact production and increase costs.
Technological Obsolescence:
The electrical control systems industry is constantly evolving. The company needs to keep up with technological advancements to remain competitive, and failure to do so could lead to obsolescence of its products and services.
What are the listed Peers?
- Siemens
- ABB India
- CG Power
- Havells India
- L & T
Which states is the company active in?
- Delhi: Multiple projects in the national capital region.
- Haryana: Their headquarters and manufacturing facility are located in Faridabad.
- Uttar Pradesh: They have completed projects in various cities across the state.
- Rajasthan: Presence in cities like Jaipur and Udaipur.
- Punjab: Projects in cities like Mohali and Ludhiana.