BACKGROUND
Our Company was originally incorporated as "Atam Valves Private Limited" on
September, 30th, 1985 under the provisions of the Companies Act, 1956 vide
Certificate of Incorporation issued by the Registrar of Companies, Punjab &
Chandigarh. Later on, the company got converted into public limited company and the name
of the company was changed to – "Atam Valves Limited" and fresh Certificate
of Incorporation dated November 24th, 2017 was issued by the Registrar of the
Companies, Punjab & Chandigarh. Atam Valves Limited is one of the leading
manufacturers of Valves, Cocks & Boiler Mountings in India. We are also an ISO 9001:
2008, ISO 14001: 2004, and CE Monogram and PED approved company & winner of National
Award 2006 for quality and National Award 2009 for entrepreneurship Govt. of India. Ever
since inception in 1972 , our brand names ATAM & FEBI emerged as formidable names in
Bronze , Brass , Cast Iron , Cast Steel , Forged Steel , S.S. Valves & cocks ,
conforming to various National & International standards . We are pioneers in
developing Ball Valves in India and enjoy a strong Brand image. ATAM VALVES are suitable
for industrial and domestic applications as well as for controlling a wide variety of
service Rs.uids, Oil & steam, within various pressure & temperature ranges.
"ATAM" products are approved by various quality institutions including bureau of
Indian Standards. Indian Boiler Regulations and enjoy an active patronage of numerous
Government and eminent Industrial houses in India & International Market.
ECONOMY OVERVIEW
Global Economy
The global economy is facing a slowdown in 2023, after a modest recovery in 2022 from
the pandemic-induced recession. The main factors that are weighing on the global growth
prospects are:
•The ongoing war between Russia and Ukraine, which has disrupted the energy supply
and trade in Europe and beyond. The conflict has also increased geopolitical tensions and
uncertainty, affecting business confidence and investment.
•The inflationary pressures that have emerged from the surge in commodity prices,
especially oil and gas, as well as the supply chain bottlenecks and labor shortages that
have hampered production and distribution across various sectors.
•The policy tightening by some major central banks, such as the US Federal Reserve
and the European Central Bank, which have started to raise interest rates and reduce their
asset purchases in response to the rising inflation and growth expectations. This has led
to higher borrowing costs and lower liquidity for businesses and consumers, especially in
emerging markets that are more vulnerable to capital outflows and currency depreciation.
•The uneven vaccination progress and the emergence of new variants of the
coronavirus, which have posed challenges for the public health and economic recovery in
some regions, such as Africa and Latin America. The pandemic has also exacerbated social
inequalities and poverty, as well as environmental issues.
The global economy is expected to grow by around 2% in 2023, down from 3.1% in
2022. The growth rate is below the pre-pandemic average of 3.5% and reflects the divergent
performance of different regions and countries. Some of the highlights are:
•China is expected to lead the global growth with a rate of 5.5% in 2023, as it
reopens its economy after a prolonged period of lockdowns and zero-covid policies. Chinas
growth will be supported by its strong domestic demand, infrastructure spending, and
export competitiveness.
•India is expected to grow by 7.8% in 2023, rebounding from a contraction of 7.3%
in 2020. Indias growth will be driven by its large population, favorable demographics,
low interest rates, fiscal stimulus, and structural reforms.
•The US is expected to grow by 1.8% in 2023, slowing down from 5.6% in 2022. The
US growth will be constrained by the fading effects of the fiscal stimulus, the monetary
policy tightening, the supply chain disruptions, and the labor market challenges.
•The euro zone is expected to grow by 1.4% in 2023, decelerating from 4.6% in
2022. The euro zone growth will be hindered by the energy crisis, the political
uncertainty, the fiscal consolidation, and the structural weaknesses.
•Japan is expected to grow by 0.8% in 2023, moderating from 2.7% in 2022. Japans
growth will be limited by its aging population, low productivity, high debt, and
defiationary pressures.
The global economic outlook for 2023 is subject to significant risks and
uncertainties, both on the upside and downside. Some of the potential scenarios that could
affect the global economy are:
•A faster resolution of the Russia-Ukraine war, which could ease the energy supply
constraints and improve the geopolitical stability.
•A stronger coordination of fiscal and monetary policies among major economies,
which could boost the global demand and confidence.
•A further escalation of the Russia-Ukraine war, which could trigger a wider
military conflict and a global oil shock.
•A sharper than expected tightening of monetary policies by major central banks,
which could cause a financial market turmoil and a credit crunch.
Indian Economy
The Indian economy is expected to grow by 7% in FY 2023, recovering from a contraction
of 7.3% in FY 2021 due to the impact of the covid-19 pandemic. The growth is supported by
the easing of lockdowns, the acceleration of vaccination, the improvement of consumer and
business confidence, and the stimulus measures by the government and the central bank. The
main sectors that are contributing to the growth are agriculture, industry, and services.
Agriculture is estimated to grow by 3.9%, benefiting from a good monsoon and higher rural
demand. Industry is estimated to grow by 9.6%, driven by manufacturing, construction, and
mining, which have witnessed a revival of domestic and external demand. Services are
estimated to grow by 8.4%, led by contact-intensive sectors such as trade, hotels,
transport, and financial services, which have recovered as the pandemic situation
improved. The main challenges that the economy faces are inflation, fiscal deficit,
external sector volatility, and structural reforms. Infiation has remained above the
target range of 2-6% due to the rise in food and fuel prices. The central bank has raised
its policy rate by 50 basis points to contain inflationary pressures. The fiscal deficit
has widened to 6.8% of GDP due to lower revenue collection and higher expenditure on
health, social welfare, and infrastructure. The external sector has been resilient with a
current account surplus and high foreign exchange reserves, but faces risks from global
uncertainties, currency appreciation, and trade deficit. The economy needs to undertake
more structural reforms to enhance its productivity, competitiveness, and inclusiveness.
INDUSTRY REVIEW
Global Valve Industry
The global valve industry is a part of many sectors that use valves to control the flow
and pressure of Rs.uids. The industry is expected to grow at a rate of 5% to 7% from 2022
to 2028, driven by the demand from power and chemical industries, the need for
desalination activities, and the adoption of advanced technologies. The industry faces
some challenges such as the stagnant growth in developed countries, the high cost of
installation and maintenance, and the diverse regional policies and certifications.
The industry can be segmented by type, material, component, function, application, and
geography. The most popular types of valves are ball valves and check valves. The most
common material for valves is steel. The main components of valves are actuator,
positioner, and valve body. The main functions of valves are isolation, regulation, safety
relief valve, special purpose, and non-return. The largest application segments for valves
are oil & gas, energy & power, and water & wastewater treatment. The dominant
geographical region for valves is Asia-Pacific.
The global valve market can also be segmented by geography into North America, Europe,
Asia-Pacific, Latin America, and Middle East & Africa. Asia-Pacific is expected to
dominate the global valve market during the forecast period due to the rapid
industrialization and urbanization in countries such as China, India, Japan, and South
Korea. North America and Europe are also expected to have significant shares in the global
valve market due to their established industries and advanced technologies. The industry
is highly competitive and fragmented with many players operating at regional and global
levels.
Indian Valve Industry
The valve industry in India is a vital part of the engineering sector, as valves are
used to control the flow of fluids and gases in various industrial applications. Valves
are essential components in sectors such as oil and gas, power generation, petrochemicals,
fertilizers, water and wastewater management, and others. According to a various reports,
the Indian valve market size is projected to reach $3 billion by 2023, growing at a
compound annual growth rate of over 9% from 2017 to 2023. The report attributes this
growth to the increasing demand for flow control equipment, the expansion of pipeline
infrastructure for natural gas distribution, and the government initiatives to boost the
manufacturing sector under the Make in India campaign.
The Indian valve industry is also becoming more competitive in the global market, as it
offers cost-eRs.ective and quality products to meet the diverse needs of customers.
According to a various reports, India is the second-largest exporter of valves in
Asia-Pacific, after China, and accounts for about 5% of the global valve exports. The
reports states that the
Indian valve industry has a complete portfolio of products, ranging from conventional
valves to smart valves, which are integrated with sensors and actuators to provide
real-time feedback and control. The reports also identifies some of the key challenges
faced by the Indian valve industry, such as lack of standardization, skilled manpower
shortage, and environmental regulations.
The Indian valve industry is expected to witness further growth opportunities in the
coming years, as the country plans to invest heavily in sectors such as renewable energy,
urban development, smart cities, and industrial corridors. The Indian Valve and Actuator
Manufacturers Association (IVAMA) is an industry body that aims to promote the ecosystem
of the valve industry and bring global business to India. The association provides various
services to its members, such as training, technical expertise, networking opportunities,
and market intelligence. The association also organizes technology meets and exhibitions
to showcase the latest developments and innovations in the valve sector.
To conclude, the valve industry in India is an important and growing segment of the
engineering sector, which contributes significantly to the Indian economy. The industry
has a strong potential to become a global leader in valve manufacturing and exports, by
leveraging its strengths and overcoming its challenges. The industry also plays a key role
in supporting other sectors that require efficient and reliable flow control solutions.
BUSINESS STRATEGY
In response to the dynamic landscape of the valve industry and our commitment to
innovation and sustainability, Atam Valves Limited has developed a strategic roadmap to
drive our growth and solidify our leadership position. Our strategy revolves around three
key pillars: Innovation, Sustainability, and Customer-Centricity.
Innovation: We recognize that innovation is the lifeblood of our industry. We are
dedicated to staying at the forefront of valve technology, investing in research and
development to create cutting-edge solutions that meet the evolving needs of our clients.
By continuously improving the design, materials, and functionalities of our Valves, Cocks
& Boiler Mountings, we aim to enhance performance, reliability, and safety for our
customers.
Sustainability: At Atam Valves Limited, we are fully aligned with the imperative to
Go Green. Our commitment to environmental stewardship drives us to integrate
eco-friendly practices throughout our operations. From responsible sourcing of materials
to the reduction of waste and energy consumption in our manufacturing processes, we are
focused on minimizing our environmental footprint. By offering Valves, Cocks & Boiler
Mountings manufactured with sustainable materials and processes, we aim to provide
environmentally conscious solutions that resonate with both customers and regulators. Customer-Centricity:
Our customers are at the heart of everything we do. We are dedicated to understanding
their unique challenges and providing tailored valve solutions that address their specific
needs. Building strong and enduring relationships with our clients is a cornerstone of our
strategy. We will achieve this by offering excellent customer service, prompt
responsiveness, and a comprehensive understanding of their industries and operational
requirements.
By executing this strategy, we are poised to achieve sustainable growth, increased
market share, and enhanced brand reputation. We will continually assess our performance
against these strategic pillars, making adjustments as necessary to adapt to changing
market dynamics and emerging industry trends. Atam Valves Limited is committed to being a
catalyst for positive change within the valve industry, a leader in innovation, and a
partner in our customers success.
OPERATIONS
In the highly competitive and intricate landscape of the valve industry, Atam Valves
Limited maintains a steadfast commitment to operational excellence, innovation, and
customer satisfaction. Our operations are geared towards delivering high-quality valve
solutions that meet the demanding requirements of diverse sectors including oil and gas,
petrochemicals, power generation, water treatment, and more.
Design and Engineering Expertise: At Atam Valves Limited, our operations commence
with a meticulous design and engineering phase. Our experienced teams collaborate closely
to conceptualize and develop valve solutions that optimize performance, reliability, and
safety. By utilizing advanced software and simulation tools, we ensure that our products
are tailored to the unique operational environments of our clients.
Advanced Manufacturing: Leveraging state-of-the-art manufacturing facilities, we
bring our designs to life. Our production processes adhere to rigorous quality standards
and utilize cutting-edge technologies, resulting in our products that are not only
compliant with industry regulations but also exceed performance expectations. The
integration of automation and precision machining enhances the consistency and efficiency
of our operations.
Quality Assurance: The integrity of our products is paramount. Rigorous quality
control protocols are implemented at every stage of manufacturing, ensuring that each
valve leaving our facilities is subject to comprehensive testing and inspection. This
commitment to quality extends beyond product delivery, as we offer ongoing support to our
clients, guaranteeing the continued performance of our products in the field.
Supply Chain Excellence: Our operations are intricately linked to a global network
of suppliers who share our dedication to quality and reliability. We maintain transparent
relationships with our partners to ensure the timely delivery of raw materials and
components. By fostering collaboration and adherence to ethical and sustainable practices,
we uphold the integrity of our supply chain.
Environmental Responsibility: Atam Valves Limited acknowledges its role in
contributing to environmental sustainability. In our operations, we are vigilant about
minimizing waste, reducing energy consumption, and adopting eco-friendly practices
wherever feasible. We are committed to providing valve solutions that not only enhance
industrial processes but also align with our eco-conscious values. Looking Ahead: As
we navigate the evolving trends in the valve industry, Atam Valves Limited remains agile
and adaptable. We are excited to announce that we are entering the market of bathware
products, which is a fast-growing and lucrative segment in the home improvement industry.
Bathware products include sanitary ware, faucets, showers, bathtubs, and accessories that
enhance the aesthetics and functionality of bathrooms. We believe that our strong brand
image, and our wide distribution network will give us a competitive edge in this segment.
We have allocated a capex for setting up a state-of-the-art manufacturing facility for
bathware products. We expect to launch our bathware products by the end of 2023-24, and
capture a significant market share in the next few years. Bathware market cap is currently
67,000 cr. We are confident that our entry into the bathware segment will create value for
our shareholders, customers, and stakeholders.
OPPORTUNITIES AND THREATS
The valve industry operates within a dynamic environment characterized by evolving
technological trends, market shifts, and regulatory changes. As a key player in this
industry, Atam Valves Limited is positioned to capitalize on various opportunities while
proactively addressing potential threats.
Opportunities
•The global industrial valves market is expected to grow at a CAGR of more than 5%
from 2023 to 2028, driven by the growing demand from the power and chemical industries, as
well as the increase in demand for desalination activity.
•The Asia-Pacific region is expected to dominate the market and witness the
highest growth rate, owing to the rapid industrialization, urbanization, and
infrastructure development in countries like China, India, Japan, and South Korea.
•The adoption of valves in the 1" to 6" size range is increasing, as
they offer less turbulence to the flow and ensure lower pressure drops. These valves are
suitable for various critical and severe service applications in multiple industries, such
as oil & gas, energy & power, water & wastewater treatment, chemical, food
& beverage, and pulp & paper.
•The emergence of new technologies, such as smart valves, digital valve
positioners, and wireless valve monitoring systems, is creating new opportunities for the
valve industry. These technologies can enhance the performance, efficiency, reliability,
and safety of valves and reduce operational costs.
Threats
•The industrial valve market faces stiRs. competition from local and regional
players, who offer low-cost products with similar or better quality. This may erode the
market share and profitability of the established players.
•The malfunctioning or failure of valves and other products can result in
unplanned downtime or shutdown of a plant, which can have enormous consequences for the
facility, such as loss in production, heightened repair costs, related labor costs, and
wastage of raw materials. Therefore, the valve industry needs to ensure high-quality
standards and regular maintenance of its products.
•The industrial valve market is subject to various environmental and safety
regulations, which may vary across different regions and countries. These regulations may
impose additional costs and challenges for the valve industry to comply with them
•Rapid technological changes can render existing products obsolete or require
significant investments to keep up. Staying informed and adaptable to emerging
technologies is essential.
In response to these opportunities and threats, Atam Valves Limited maintains a
proactive approach. We are committed to staying abreast of industry developments,
investing in research and development, and fostering strong relationships with clients and
partners. By continuously monitoring the market landscape and leveraging our strengths, we
are well-positioned to navigate challenges and seize opportunities, ensuring the sustained
growth and success of Atam Valves Limited within the dynamic industry.
RISKS AND CONCERNS THAT THE MANAGEMENT PRECIEVES
In the context of our industry, Atam Valves Limited acknowledges a set of potential
risks and concerns that require vigilant management. Market volatility and demand
fluctuations pose challenges due to economic cycles and geopolitical tensions, impacting
project timelines and investments.
The valve industry is also affected by the fluctuations in the oil and gas market,
which is a major consumer of valves. The decline in oil prices in 2014 and 2020 has
reduced the investments and activities in the upstream, midstream, and downstream sectors,
leading to lower demand for valves. The industry needs to cope with the volatility of the
oil and gas market by exploring new opportunities in other segments, such as power, water,
and chemical.
Another risk factor for the valve industry is the increasing competition from low-cost
manufacturers, especially from China. These manufacturers can offer cheaper products with
comparable quality and performance, posing a threat to the established players in the
market. The industry needs to differentiate itself by focusing on innovation, quality,
reliability, and customer service. The valve industry also faces regulatory and
environmental pressures from various governments and agencies. The industry needs to
comply with the standards and specifications for valve design, manufacturing, testing, and
operation, as well as the requirements for local content, energy efficiency, and emissions
reduction. The industry needs to invest in research and development, as well as adopt best
practices to meet these challenges.
In response, Atam Valves Limited maintains a proactive risk management approach,
emphasizing rigorous assessment, innovation, and a commitment to quality to navigate these
challenges while pursuing sustained growth and industry leadership.
DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL EFFECIENCY
The Revenue from Operations of the company for the year ended March 31, 2023 were Rs.
4900.89 Lakhs as compared to Rs. 2033.06 Lakhs in the previous year. The company has
achieved a commendable profit of Rs. 766.76 lakhs during the year, reflecting its
operational efficiency and competitiveness in the valves, cocks and boiler mountings
industry. The Company on a continuous basis sets up policies to exercise cost control and
cost reduction programme. The company has maintained its quality standards and customer
satisfaction by producing and supplying various types of valves and cocks for different
applications and industries. The company has also invested in upgrading its machinery,
technology, and infrastructure to enhance its production capacity and reduce its
operational costs. The company has also adhered to the safety and environmental
regulations and norms while manufacturing its products. The company is confident of
sustaining its growth momentum and profitability in the future by leveraging its
expertise, experience, and innovation in the valves, cocks and boiler mountings industry.
KEY FINANCIAL RATIOS
As per the provisions of SEBI (Listing Obligations and Disclosure Requirements)
Regulations 2015, the key financial ratios are given below:-
Sr. No |
PARTICULAR |
Current year |
Last Year |
Change (IN%) |
Explanation for significant change in Accounting Ratios |
1. |
Debtors Turnover Ratio(In times) |
3.89 |
4.04 |
(3.89) |
NA |
2. |
Inventory Turnover(In times) |
4.08 |
2.18 |
87.06 |
There is substantial increase in revenue as compared to previous year
leading to quick movement in inventory and working capital which has resulted into
improvement in Inventory turnover Ratio. |
3. |
Interest Coverage Ratio |
28.04 |
7.43 |
277 |
There is substantial increase in revenue as compared to previous year
whereas indirect and fixed expenses have not increased in that proportion resulting into
higher profits which further resulting in to improvement in the Interest Coverage Ratio. |
4. |
Current Ratio(In times) |
2.88 |
2.43 |
18.80 |
NA |
5. |
Debt Equity Ratio(In times) |
0.27 |
0.50 |
(47.08) |
There is substantial increase in revenue as compared to previous year
whereas indirect and fixed expenses have not increased in that proportion resulting into
higher profits which further resulting in to improvement in Debt equity ratio. |
6. |
Operating Profit Margin |
20.80 |
10.96 |
90 |
There is substantial increase in revenue as compared to previous year
whereas indirect and fixed expenses have not increased in that proportion resulting into
higher profits which further resulting in to improvement in the Operating Margin Ratio. |
7. |
Net Profit Margin(In %) |
15.57 |
6.69 |
132.75 |
There is substantial increase in revenue as compared to previous year
whereas indirect and fixed expenses have not increased in that proportion resulting into
higher profits which further resulting in to improvement in Net profit Ratio. |
MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS
The total employees strength of the Company was 196 as on 31st March,
2023., who are the backbone of success and growth of the Company. The company has fostered
a culture of mutual respect, teamwork, and innovation among its workforce, and has
provided them with adequate training, development, and welfare opportunities. The company
has also maintained cordial and harmonious industrial relations with its employees and
their representatives, and has ensured compliance with all the applicable labour laws and
regulations. The company values its human capital as its most precious asset, and strives
to create a conducive and rewarding work environment for them.
OUTLOOK
With the "New Normal" being set, we expect a challenging future ahead. Though
we may have to face and manage challenges in the short term over the next few months, we
foresee a Silver lining ahead. Further with the ampliRs.ed focus on "Aatma Nirbhar
Bharat", we foresee an increased shift towards Domestic Production and Sales. This
will definitely help in effectively utilizing our plant capacities to the optimum and also
help in planning for future growth and investments.
AIM
Atams aim is to give long term commitment to their customers by supplying best quality
products. To serve the nation by giving more employment and by increasing production
continuously. To earn more foreign exchange for the country by exploring more export
markets.
CAUTIONARY STATEMENT
The information and opinions expressed in this report may contain certain
forward-looking statements, which the management believes are true to the best of its
knowledge at the time of its preparation. Actual results may differ materially from those
either expressed or implied in this report.
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