Basic analysis of high energy batteries

Basic analysis of high energy batteries: How important is electricity to the world? It has revolutionized many industries, and demand in emerging economies continues to grow. Electricity storage is critical in today’s competitive markets, benefiting customers and creating healthy competition for manufacturers. High-energy battery basic analysis analyzes business, industry environment, finances, planning, etc.

Basic analysis of high energy batteries

The company was founded in 1979. High Energy Batteries (India) Limited primarily manufactures high-tech batteries for the Army, Navy and Air Force as well as commercial batteries for automotive and standby VRLA (Value Regulated Lead Acid) applications.

The company’s research and development department supports the design, development and manufacturing of silver-zinc oxide, nickel-cadmium and silver-magnesium chloride batteries used in underwater propulsion, control guidance, communications, emergency starting and aerospace applications. .

segment analysis

The company also exports its products to various countries, with domestic revenue accounting for majority of its revenue in FY23. The revenue consists of 65% from Navy and Naval Research Laboratories, 6% from DRDO Laboratories, 17% from Defense Public Sector and 12% from Aerospace and Other Sectors.

Its major customer is the Ministry of Defense, Government of India, which is the largest supplier of silver-zinc batteries and accounts for the majority of its revenue.

industry analysis

India’s defense industry is one of the largest in the world. The Department of Defense has set a goal of achieving $25 million in aerospace and defense sales by 2025, including $5 billion in exports.

FDI into the industry increased from 49% to 74%, allowing foreign institutions to have higher ownership and control.

By 2024-25, the government hopes to achieve defense manufacturing worth Rs. 1.75 billion (USD 21.14 billion), including defense exports worth Rs. 35 trillion (US$4.22 billion).

The Department of Defense has set a goal of achieving $25 million in aerospace and defense industry revenue by 2025, including $5 billion in exports.

Finance – High Energy Batteries

Sales and Net Profit

The company reported Rs. 92.53 crore in FY23, an increase of 16.75% from Rs. In fiscal year 22, it was $79.25 billion. High sales growth led to increased sales, with a CAGR of 18.92%.

Net profit in 2023 is 10 million won. It increased by 14.21% to 20.49 billion won. In fiscal year 22, it was $17.94 billion. The increase in net profit was due to increased sales and improved operating profit margin, recording a CAGR of 111.47%.

profit

Operating profit margin was 34% in FY23, down 8.10% compared to 37% in FY22. The decrease in margin is due to an increase in fixed costs such as raw material costs and labor costs, which decreased compared to the same period last year. Average 28.37% over 5 years

NPM in FY23 decreased by 3.22% to 30% compared to 31% in FY22. The decline in margins was due to a sustained decline in operating margins from FY21 to FY23, followed by a surge in operating margins from FY20 to FY21. The five-year average was 18.92%.

rate of return

RoE stood at 32.26% in FY23 compared to 37.43% in FY22. The 13.81% decrease is due to a drop in net profit margin and an increase in reserves.

RoCE decreased by 3.51% to 35.10% in FY23 compared to 36.38% in FY22 due to lower profits. However, RoCE has a higher rate of return than RoE, indicating better debt utilization.

debt analysis

The debt ratio hit an all-time low of 0.29 in fiscal 23 compared to 0.45 in fiscal 2022. The average for 5 years was 1 person. Debt reduction can help significantly strengthen a company’s financial health.

The interest coverage ratio in FY23 increased from 7.38x to 8.83x in FY22. The improvement in debt ratio is due to debt reduction and low interest rate payments, which will ultimately help improve the company’s cash flow and enable facility investment when necessary.

Basic analysis of high energy batteries – key indicators

Let’s take a look at some of High Energy Batteries (India) Ltd.’s key indicators.

Future Plans

• The company plans to expand its product mix by entering vanadium redox flow batteries (VRFB) for hydrogen-powered power generation and fuel cells and flow batteries used in bulk energy storage applications.
• The company plans to focus on products that offer additional benefits and features, especially in the areas of battery and power pack system integration. This move will give it a stronger presence in both defense and non-defense markets in India. The move could also help expand its customer base.
• The huge capital expenditure planned by the Indian government could provide huge opportunities for large order flow to private sector companies.

conclusion

As we near the conclusion of the article, let’s take a brief look at high-energy batteries. The company produces military batteries, and the cost of materials such as silver, zinc and copper fluctuates due to supply and demand issues. The military’s order flow puts much of its revenue at risk.

However, the Atmanirbhar plan holds a positive outlook for the company. Both sales and profits are increasing. What do you think about the future of the company? Does the company have potential? Let us know your thoughts in the comments section below.

Written by Santosh

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