With a market capitalization of Rs.488 crores, this microcap company’s shares opened Thursday’s session flat
at Rs.444, up from the previous close of Rs.430.65, and reached an intraday high of Rs.444, reflecting a gain
of about 3 percent.
Financials:
Looking at the Tembo Global Industries financials, the revenue increased by around 6 percent from Rs. 121.65 crores during the March quarter to Rs. 128.41 crores in the June quarter. On the other hand, the net profits surged by 105 percent from Rs. 2.64 crores to Rs. 5.42 crores during the same timeframe.’
Comparing the same metrics on a YoY basis, the revenue zoomed by 58 percent from Rs. 81.09 crores during Q1FY24 to Rs. 128.41 crores in Q1FY25. In addition, the net profits magnified by around 187 percent from Rs. 1.89 crores to Rs. 5.42 crores during the same timeframe.
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Important Financial Ratios:
In terms of key financial metrics, the company reported a Return on Equity (RoE) of 21.48 percent and a return on capital employed (RoCE) of 31.25 percent for the period spanning FY23-24. Further, the net profit margin during FY23-24 was 3.20 percent.
Defence Sector:
Recently, Tembo Global Industries announced a significant strategic partnership with a leading European company to establish a state-of-the-art arms and ammunition manufacturing facility in India.
The newly signed Memorandum of Understanding (MoU) represents a major milestone for Tembo Global as it ventures into the defence manufacturing sector, backed by a well-established international partner.
The MoU outlines a comprehensive partnership wherein the European company will lend its expertise to assist in the establishment of the new manufacturing plant.
The agreement also includes a strategic buy-back arrangement, under which the European partner will purchase a significant portion of the firearms produced by Tembo Global Industries Limited.
Furthermore, the European company will provide crucial technical expertise and operational support, ensuring that the new manufacturing facility meets the highest standards in arms production.
Management Guidance:
The company is undergoing a substantial greenfield expansion at its Vasai facility, which will increase its manufacturing capacity from 15,000 tons per annum to 105,000 tons per annum by FY25.
This expansion aims to enhance production capabilities and meet growing demand across various sectors, including automotive and infrastructure.
Tembo Global Industries has reported a robust order book valued at approximately Rs. 800 crores as of Q1 FY25, which includes several L1 orders. This strong backlog is expected to support revenue growth and operational stability in the coming fiscal year.
As of FY24, the company generates 30 percent of its revenue from the Engineering Products sector, with the remaining 70 percent coming from the textile industry.
By FY27, the company plans to diversify its revenue sources, targeting 20 percent from the defence sector, 65 percent from Engineering Products, and 15 percent from textiles.
Moreover, Tembo Global Industries is planning to establish in-house manufacturing of yarn post-FY27, aiming to tap into both domestic and export markets.
Customer Base:
Tembo Global Industries Ltd has a diverse customer base that spans both domestic and international markets. The company serves various sectors including industrial, commercial, utility, and OEM installations in India.
Some of the notable clients are KEO, Saudi Aramco, Shapoorji Pallonji, ECG, Tata Projects, Tyco, Drake & Scull, Sterling & Wilson, Bayaty Architects, Godrej, etc.
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Company Profile:
Incorporated in 2010, Tembo Global Industries Ltd specialises in the manufacturing and fabrication of a wide range of engineering products.
The company produces items used in pipe support systems, fasteners, anchors, HVAC systems, and anti-vibration solutions for various sectors including industrial, commercial, and utility installations.
Tembo’s product portfolio includes metal and base metal products like bolts, clamps, hangers, and fittings for pipes, as well as textiles such as yarn and fabrics.
Written By Vaibhav Patil
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