Narendra Goliya, Chairman & Managing Director, Rishabh Instruments

1 Sep 2023 , 09:19 AM

Run us through the company’s business model and key strengths vis-a-vis peers.

Our company operates in five main business verticals likes – Electrical Automation, Metering Control and Protection devices, Portable Test and Measurement Instruments Solar string inverters and Aluminium HPDC. These businesses follow the B2B model. The Electrical business is done via our authorised Channel Partners whereas for Aluminium HPDC, we deal directly with the customers.

Our strengths encompass various areas. We operate vertically (having backward and forward integration), managing everything in-house with advanced manufacturing capabilities. We design and manufacture our own moulds, we have an injection moulding facility, we have our own EMS (SMT facility) automation facility, calibration and testing facility along with R&D centre.  Our testing facilities meets the highest standards. We offer a diverse range of products and services, supported by a global partner network. Innovation drives us, as we constantly seek to enhance our offerings. Our recognized brands, cost competitiveness, and automation focus strengthen us. Lastly, we’re dedicated to global certifications and environmental initiatives, aligning with sustainable practices.

Which are the key listed peers of the company?

There aren’t any other companies out there, whether in India or anywhere globally, that do exactly what we do. So, when it comes to sizing ourselves up against others, it’s a bit of an apples-to-oranges situation.

We’ve got contenders both locally and on the world stage. With players like Masibus Automation and Instrumentation Private Limited, Select Controls Private Limited, Schneider Electric India Private Limited, and more. Our success revolves around making our customers happy, keeping our hold in the market strong, and giving the competition a real challenge. It’s not just about pricing, but how well we connect with our customers, the quality of what we offer, how innovative we are, and our knack for custom solutions. Plus, we’re dealing with some challenges that other companies in the electrical and aluminum sectors face – like sourcing materials and staying competitive cost-wise with global players. It’s all part of the mix that determines how well we do.

Share with us the key expansion projects of the company, highlighted as one key area of use of IPO proceeds.

Our intention is to allocate a significant portion of the Net Proceeds obtained from the Offer to facilitate the expansion of our Nashik Manufacturing Facility I. However, I must clarify that we haven’t finalized the precise breakdown of how every portion of the Net Proceeds will be utilized. The allocation strategy we’re working with is grounded in management estimates, and we’ve also sought input from experts. Sanjay Patil, an architect, has contributed insights into cost evaluations, and Manish M Kothari, a chartered engineer, has provided his official certification. This combined approach ensures that we are making prudent decisions regarding the utilization of these funds.

Share with us the key macro opportunities for your company across all key markets.

In the Indian market, international players dominate with the top 5 companies controlling around 50% of the share. Local players are stepping up by competing on pricing and service, emerging as strong contenders. Rishabh Instruments is a global leader in Analog Panel Meters, Leading players in Current transformers and leads the electrical transducers market with appx 37% share in India

On a broader scale, the rising demand for eco-friendly solutions, and our focus on green initiatives and energy-efficient products puts us ahead. Additionally, the push for digital transformation, electric vehicles, in-vehicle infotainment, and renewable energy projects will keep demand strong. The surge in digitalization, driven by 5G, growing internet and smartphone use, and robust digital infrastructure, is boosting sectors like FinTech, EduTech, AgriTech, and MedTech. With sustained consumption, especially in urban areas, and a strong financial foundation, the Indian economy is poised for growth in 2023 and 2024.

What is the growth strategy of the company?

So, when it comes to growth, we’ve got a couple of strategies on our radar. First, we’re all about teaming up with big players – both global and local – in the electrical and aluminium sectors. We’re looking for those perfect fits where our strengths combine to create something amazing. And then there’s acquisitions – we’re on the lookout for prime opportunities, whether they’re right here in India or beyond. We want to add to what we offer, whether it’s something that fits perfectly or something new that our customers will love.

It all started with our move to acquire Lubuskie Zakłady Aparatów Elektrycznych “Lumel” Spółka akcyjna in Poland. In Fiscal 2020 – we made the deal with Shanghai VA in China. They’re all about digital analog multimeters, laboratory power supplies, and electronic measuring instruments. Then in fiscal year 2021, our Material Subsidiary, Lumel SA, snagged some pretty important assets from Relpol S.A in Poland. We’ve got not one but two modification centres. One’s in Essex, United Kingdom, thanks to Sifam UK. The other’s in Kennesaw, United States, which we got through our new Subsidiary, Sifam USA.

Thus enhanced product innovation, engineering and design competence while focussing on higher value addition, Expanding geographical footprint, continue to pursue our strategy for inorganic growth, Explore opportunities to tap emerging products and services segments and Promote product localization are our key growth strategies.

How is the company contributing to ESG (Environment, Social and Governance)?

We are gearing up for a lot more responsibility, not just about profits but also taking care of everyone connected to us – from investors to the companies we work with, and even the people using our products.

We are instrumental in producing energy saving devices, Conservation of natural resources like energy, water by implementation of resource management program. Prevention of pollution, accidents and ill health due to implementation of good work practices.

We are also committed to IIT Jodhpur to set the Rishabh centre for Green Energy. The facilities at Nashik create employment opportunities for the local people especially the rural & tribal women thereby promoting women empowerment Rishabh also focuses on skill development of its employees Rishabh Instruments CSR activities cover various fields such as education, animal welfare, alleviating poverty, hunger, malnutrition and empowerment of women.

Provide us with a snapshot of the company’s financial profile. What are the company’s key strengths thereof?

Our total revenue went up, by Rs. 992.90 million more to be exact, which is a 21.11% jump. From Rs. 4,702.50 million in Fiscal 2022, we took it to Rs. 5,695.40 million in Fiscal 2023. our sales went up by Rs. 962.30 million, and we also got an extra Rs. 17.02 million from our services. Plus, our profit was about Rs. 0.35 million extra, a 0.07% rise. From Rs. 496.52 million in Fiscal 2022, we ended up with Rs. 496.87 million in Fiscal 2023.

Does the company have a dividend distribution policy in place?

For Fiscals 2023, 2022, and 2021, we gave out dividends at 0.001% on the CCPS. Looking forward, it depends on a few things – like how much we make, how our finances look, and where our money goes. Both the Board of Directors and shareholders weigh in on it. They check everything, and if things line up, dividends might be in the cards. Just know, we stick to our Articles of Association and the Companies Act. One more thing – we might decide to use the money to grow our business. It’s all about finding the right balance, managing our business, and keeping everyone informed.