Sealmatic India Limited is engaged in the business of designing and manufacturing of mechanical seals and associated products. The Mechanical seals manufactured by the company are mainly used in pulp & paper, Oil & Gas, refinery, petrochemical, chemical, fertilizer, power, mining, aerospace, marine, pharmaceutical, and other industrial spaces.
Sealmatic India manufactures customized seals in order to meet the requirements of the customers. Apart form India, the operations of the company are spread in countries like the USA, Sweden, the UK, Germany, Italy, Japan, Norway, Switzerland, Denmark, Netherlands, Australia, France, and many more.
MARKET LEADER IN INDIAN SEAL MANUFACTURING COMPANIES
Sealmatic India is one of the few Indian Company Approved/ Registered as vendors with National & International customers. The company has customers from India as well as overseas. Its products are supplied to industry leaders in Oil &
Gas, Refinery, petrochemical, chemical, pharmaceutical, fertilizer, power sector, mining. Pulp & paper industry, aerospace. Sealmatic India is an Approved and Registered vendor for companies like Engineers India Limited and Projects & Development India Limited.
ROBUST MANUFACTURING INFRASTRUCTURE
- Sealmatic India has an existing manufacturing unit is located in Thane India. The Company has also planned
to set up its second manufacturing unit at Thane. - The manufacturing facility is equipped with automated machines to ensure precision and quality. Manufacturing
infrastructure is equipped with complete automation right from designing to the finished products. - Some of the most significant reasons for raising money through IPO for the company is to use it in additional Capital Expenditure, which is to purchase more plant, and machinery, and also for some product development.
ABOUT THE OFFER
FINANCIAL PERFORMANCE
in Lakhs
INVESTMENT RATIONALE
Monopoly in the Indian market
- Currently, Sealmatic India is the only domestic Manufacturer of mechanical seals in India, which could be seen as a strategic advantage for the company for years to come as it has established its market presence.
- Sealmatic India is one of the few Indian Company Approved/ Registered as vendors with National & International customers. The company has customers from India as well as overseas. Its products are supplied to industry leaders in Oil & Gas, Refinery, petrochemical, chemical, pharmaceutical, fertilizer, power sector, and mining.
- The company supplies its products in international markets too, like the USA, Sweden, the UK, Germany, Italy, Japan, Norway, Switzerland, Denmark, Netherlands, Australia, France, and many more.
Strong fundamentals to drive growth
- The company has strong a robust growth in its financials, which indicates that it is a steady company that is headed for growth in the future considering the rapid growth of the Mechanical seals industry in India as well as worldwide.
- Its revenue, operating margins, and Profits have been drastically increasing (about an average growth rate of 25% in revenue) over the period of years, which is a good sign that the company should continue to provide stellar results.
- The EPS of the company saw an average growth of around 30%, which is again a convincing sign for the company.
- The total assets of the company grew from 2,957 Lakhs to around 3,947 Lakhs in FY2022, whereas the total borrowings of the company decreased significantly by 179 Lakhs, which shows that the company is investing more into its assets for long-term growth, and at the same time paying off its debt to a large extent.
- The ROCE and the ROE of the company have relatively remained stable over the course of the last 3 years, which indicates that the company is efficient in doing its business.
Rapid Industry development to fuel growth
- The global mechanical seals market size stood at USD 3.20 billion in 2018 and is projected to reach at USD
4.77 billion by year 2026, exhibiting a CAGR of 5.2%. - India is one of the major markets for mechanical seals. Few of the major factors that have led to high demand for
mechanical seals in India include rapid industrialization which has led to high demand for Power and
infrastructure sector, one of the other factors is that seals help in reducing leaks and help in efficiency
further reduces the cost of maintenance, Thus Indian Oil and Gas, Power sector, and other capital-intensive
industry has started using mechanical seals for bring efficiency in the process and reducing overall operational
cost. - The Industrial seals market in India has shown significant growth in the past two decades and is expected to
grow moderately in the coming future as well. Industrial Seals market was valued at USD 12.3 billion in 2020
and is projected to reach USD 16.5 billion by 2028, growing at a CAGR of 3.6 per cent from 2021 to 2028.
SUBSCRIBE FOR LONG TERM: The demand for mechanical seals in the Indian as well as in the international market is growing consistently, and is projected to grow at a rapid rate of 3.6% in the upcoming years. Paired with the current initiatives by the Indian Government, like “Make in India” which promotes growth and sustainability of Indian origin companies, and policies like “PM Gati Shakti” which promotes investment in Capital Expenditure by the government, the company Sealmatic India sits at the perfect cross section, being the only Indian company, and providing its products to MNCs such as Reliance, BHEL, Bharat Petroleum, Indian Oil, NTPC, and Tata.
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Very well analysed. Hope the issue does well and unlike recent IPOs creates wealth for investors.