The shares of one of the leading Aerospace, Defence & Space (A&D) companies is in focus, post acquisition of the remaining stake in Aerotek Sika Aviosystems Private Limited and stock split of 1:5.
Price movement
With a market capitalization of Rs. 1,049 Crores, the shares of Sika Interplant Sytems Ltd made a day high of Rs 2,544.20 per share, up by 2.91 percent from its previous day’s close price of Rs. 2,470.15. It is trading at a discount of 30 percent from its 52-week high.
About the Acquisition
The management of SIKA has decided that it will conduct a stock split in the ratio 1:5 and has set March 17, 2025, as the record date. This way, one equity share with a face value of Rs 10 /- each will be split into five equity shares with a face value of Rs 2 each.
In addition to it, on 10 March 2024, Sika Interplant Sytems Ltd announced that it had acquired the remaining 49.14% Stake in Aerotek Sika Aviosystems Private Limited.
Aerotek Sika Aviosystems Private Limited (ASAPL) became a wholly owned subsidiary of Sika Interplant Systems Ltd (SIKA). SIKA also stated that this acquisition has been made to gain complete control over ASAPL, and to enhance the operational efficiencies, and streamline the organizational structure for improved governance and business synergies.
ASAPL is a joint venture, incorporated on 26 June 2015, between SIKA Aerospace & Defence India and UK-based Aerotek Aviation Engineering Ltd for the manufacture and Maintenance, Repair, and Overhaul (MRO) of aeronautical products and systems.
Financial Overview
It posted a revenue of Rs 37.98 crores in Q3 FY25, up by 14 percent from its previous quarter revenue of Rs 33.24 crores. However, on a year-on-year basis, revenue has climbed 44 percent from its Q3 FY24 revenue. Whereas, Net Profit stands at Rs 7.14 crores as of Q3 FY25, up by 15 percent from its previous quarter, and reported a Net Profit of Rs 4.73 crore, on a y-o-y basis.
Other Information
It has a high PE of 42.4x, significantly higher than its median PE of 22.3x, but lower than the industry PE of 60.85x. It has a ROE (3 years) of 18 percent and a ROCE of 25.6 percent. The company is debt-free and is efficiently able to meet its short-term liquidity, which can be seen by its healthy current and quick ratios of 2.41x and 2.15x respectively.
Company Overview
SIKA is an engineering-driven company focused on the Aerospace, Defence & Space (A&D), and Automotive sectors in India. SIKA operates under different business segments such as engineered projects & systems; interconnect solutions & electrical module integration, maintenance, repair & overhaul (MRO); and value-added distribution.
With almost 25 years of experience, SIKA has had excellence in executing advanced engineering projects in collaboration with international technology partners for A&D customers in India. SIKA is also a qualified Indian Offset Partner (IOP) with a license for defence production from the Government of India and has had continuous design approval from the Indian Ministry of Defence’s Centre for Military Airworthiness & Certification since 1999.
Written by Satyajeet Mukherjee
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