Salasar Techno Engineering Limited is a leading company specializing in providing customized steel fabrication solutions for various infrastructure sectors. Headquartered in New Delhi, India, the company was incorporated in 2006 and has steadily grown over the years to become a renowned name in steel fabrication and erection services. Salasar Techno Engineering caters to diverse infrastructure needs including power transmission, telecom towers, solar and railway structures, oil and gas sectors among others. With a pan-India presence and a strong clientele comprising major infrastructure players, Salasar Techno Engineering Limited is well-positioned to capitalize on India’s rapid infrastructure growth.
Salasar Techno Engineering Company Overview
Historical Evolution
Salasar Techno Engineering Limited was incorporated in 2007 by Mr. Shashank Agarwal and Mr. Alok Kumar, who identified the vast potential of steel fabrication in India’s infrastructure growth story. From its initial steel manufacturing and fabrication unit in Uttarakhand, the company gradually expanded its production capacities over the years to offer customized steel solutions for diverse infrastructure sectors.
Early Years (2006-2013):
- Founded in 2006 as a tower manufacturer aiming to be a one-stop shop for India’s telecom giants.
- Focused on engineering, design, procurement, fabrication, galvanization, and EPC (engineering, procurement, and construction) of telecom towers.
- Gained expertise and established itself as a reliable partner for power corporations and utilities.
Expansion and Growth (2014-2023):
- Diversified product portfolio beyond towers to include monopoles, poles, smart poles, and other infrastructure solutions.
- Collaborated with Ramboll, a leading consulting giant, for technical design and quality control.
- Experienced significant growth, with revenue and share price increasing steadily.
- Made its initial public offering (IPO) in 2018.
Financial Indicators
| Ratio | Value |
|---|---|
| Price | ₹ 25.05 |
| Market Cap | ₹ 3,958.94 Cr |
| P/E Ratio | 78.01 |
| P/B Ratio | 7.07 |
| ROE | 11.77% |
| ROCE | 14.23% |
| Sales Growth (1 Year) | 44.75% |
| Profit Growth (1 Year) | 26.03% |
| Debt/Equity Ratio | 0.68 |
| Dividend Yield | 0.38% |
| Promoter Holding | 63.07% |
Check out – Avance Technologies share price target
Salasar Techno share historical movement
Recent Developments
- Fund raising plans: The company’s board approved plans to raise Rs 806.4 crore through preferential allotment of equity shares and warrants on January 25, 2024.expand_more This announcement sent the company’s shares to a new 52-week.
- Bonus issue: The company announced a bonus issue in the ratio of 4:1 on December 18, 2023.expand_more The record date for the bonus issue was February 1, 2024.
- Profit Growth: The company reported a profit of Rs 17 crore in the December 2023 quarter, reflecting a positive financial performance.expand_more
- PSU and Railway Orders: Salasar Techno has secured orders from various public sector undertakings (PSUs) and Indian Railways, contributing to its growth.
Role in the Engineering Sector
Core Business Model
Salasar Techno Engineering Limited specializes in providing turnkey solutions for steel fabrication and erection requirements of varied infrastructure sectors. The company’s capabilities span:
- Design and Engineering: In-house design and engineering expertise for fabrication drawing preparation, structural designs, and prototype development.
- Steel Fabrication: Fabrication of customized steel structures including gantries, poles, monopoles, and lattice towers for power transmission, telecom, railways, and other industries.
- Galvanization Services: Galvanization facilities provide corrosion-resistant coating to fabricated steel structures.
- Project Management: End-to-end project management from manufacturing to logistics, storage and on-site erection, installation & commissioning of fabricated structures.
This integrated business model allows Salasar Techno Engineering to deliver high-quality customized steel solutions tailored to client requirements across infrastructure domains.
Infrastructure Development Initiatives
As a specialized steel fabricator, Salasar Techno Engineering contributes across various infrastructure projects:
- Power Transmission: Manufacturing and installation of transmission line towers and substation structures for major power transmission projects across India. Key clients include PGCIL, Sterlite Power Grid, L&T, GE, and Siemens.
- Telecom Infrastructure: Fabrication and erection of telecom monopoles, towers, and shelters for telecom majors like Indus Towers, ATC Telecom, Bharti Infratel, and Reliance Jio.
- Rail Electrification: Providing masts, cantilevers, and other steel structures for railway electrification projects across metro and national rail networks.
- Solar Energy: Supplying steel substructures for megawatt-scale solar power projects in India.
- Oil and Gas: Fabricated pipelines, pressure vessels, structural frames for oil and gas sector.
By delivering steel fabrication solutions for such crucial infrastructure, Salasar Techno Engineering Limited plays an instrumental role in nation building.
Salasar Techno Engineering Share Price Analysis
Current Share Price Dynamics
As of February 2024, Salasar Techno Engineering is trading at around INR 25.17 per share. The one-year price chart shows the stock reaching a 52-week high of INR 34.00 and 52-week low of INR 7.25 .
- Down 4.93% today
- Down 26.22% from 52-week high
- Up 72.16% from 1-month low
- Current price is below the pivot point of ₹25.17
- Nearest support levels are ₹24.93, ₹24.82, and ₹24.58
- Nearest resistance levels are ₹25.17, ₹25.28, and ₹25.52
Technical Analysis
Technical indicators for Salasar Techno Engineering:
Overall Trend: Neutral to slightly bearish
Key Points:
- Price: ₹25.05, down 4.93% today and 26.22% from the 52-week high.
- Moving Averages: Stock is trading above its 50-day and 200-day SMAs, but below its 10-day and 20-day SMAs. This suggests some short-term weakness but longer-term support.
- Oscillators: RSI and Stochastic Oscillator are neutral, while MACD and CCI are slightly bearish. This indicates mixed signals.
- Volume: Higher than average volume today, with 62.78% delivered. This suggests increased selling pressure.
Key Technical Indicators:
- RSI: 53 (Neutral)
- MFI: 76.2 (Overbought)
- MACD: Above centerline but below signal line (Neutral)
- ADX: 47.3 (Strong Trend)
- ROC(21): 81.5 (Strong Momentum)
Support and Resistance:
- Support: 24.93, 24.82, 24.58
- Resistance: 25.17, 25.28, 25.52
Shareholding Structure of Salasar Techno Engineering
| Stakeholder Group | Percentage |
|---|---|
| Promoters | 63.07 |
| Foreign Institutional Investors | 9.26 |
| Public & Other | 21.46 |
| Corporate Holding | 6.20 |
Annual Results and Financial Performance
In-Depth Analysis of Recent Annual Results
| Metric | 2023 | 2022 | YoY Change |
|---|---|---|---|
| Revenue (Cr.) | 303.69 | 240.80 | 26.20% |
| Net Profit (Cr.) | 16.75 | 10.77 | 55.26% |
| EPS (Rs.) | 0.11 | 0.07 | 57.14% |
| Debt/Equity | 0.68 | 0.67 | 1.49% |
Profit: Profit after tax (PAT) also grew significantly in 2023 by 26.03%, compared to 22% in 2022.
Profit Margin: The company’s profit margin improved from 4.54% in 2022 to 5.53% in 2023.
EPS: Earnings per share (EPS) increased from 0.22 in 2022 to 0.32 in 2023.
Key Ratios:
- Sales Growth: 44.75% (1 year), 23.92% (3 years), 15.11% (5 years)
- Profit Growth: 26.03% (1 year), 22% (3 years), 6.24% (5 years)
- ROE: 11.77% (1 year), 12.17% (3 years), 13.32% (5 years)
- ROCE: 14.23% (1 year), 14.02% (3 years), 15.67% (5 years)
Evaluation of Financial Health and Stability
Salasar Techno Engineering exhibits a healthy financial profile relative to engineering industry peers:
Current Price: ₹ 25.05
Strengths:
- High promoter holding (63.07%)
- Good revenue growth (44.75%)
- Good profit growth (26.03%)
Limitations:
- High P/E ratio (78.01) indicating potential overvaluation
- Negative cash flow from operations (-₹ 3.84 Cr.)
- High EV/EBITDA (37.75)
- Increasing promoter pledging (4.02% from 3.52%)
- Contingent liabilities of ₹ 180.42 Cr.
Financial Ratios:
- Profitability:
- ROE: 11.77% (Moderate)
- ROCE: 14.23% (Good)
- Operating Margin: 9.13% (Average)
- Liquidity:
- Current Ratio: 1.51 (Adequate)
- Debt/Equity: 0.68 (Low)
- Efficiency:
- Inventory Turnover Ratio: 4.82 (Low)
Overall Analysis:
Salasar Techno Engg. demonstrates some positive aspects, such as strong promoter holding, good revenue and profit growth, and moderate profitability ratios. However, several concerns exist, including high valuation multiples, negative cash flow, and increasing promoter pledging. The company’s financial health and stability require careful consideration before investment.
Salasar Techno Engineering Share Price Targets 2024-2030
Based on Salasar Techno Engineering’s growth prospects and using a relative valuation approach, the estimated share price targets over the next 7-8 years are:
| Year | Initial Target | Year-End Target |
|---|---|---|
| 2024 | ₹40.00 | ₹55.00 |
| 2025 | ₹70.00 | ₹100.00 |
| 2026 | ₹120.00 | ₹160.00 |
| 2027 | ₹180.00 | ₹220.00 |
| 2028 | ₹245.00 | ₹280.00 |
| 2029 | ₹310.00 | ₹335.00 |
| 2030 | ₹350.00 | ₹450.00 |
Key Observations:
- The model predicts a consistent upward trend in the share price, with the highest target of ₹427.20 projected for 2030.
- The initial target for 2024 is ₹44.00, which represents a potential upside of approximately 78% from the current price of ₹25.08.
- The year-end target for 2024 is ₹55.00, suggesting a potential growth of 180% from the current price.
- The significant jumps in targets between 2025 and 2026, and 2029 and 2030, require further investigation and may be influenced by specific events or developments in the company’s future.
Salasar Techno Engineering Share Price Target 2024
The share price of Salasar Techno Engineering could potentially reach Rs 40-55 by end of 2024. Some key factors supporting the estimated target are:
Strong revenue growth of 45% and profit growth of 26% in FY2022 sets solid base for future growth. Healthy order book of over Rs 1000 crores provides revenue visibility for next 12-18 months. Planned capacity expansion of setting up a new manufacturing unit in Karnataka will start contributing from mid-2024 onwards. Government’s increased infrastructure spending specially in power transmission and telecom sectors will boost order inflows. Technical indicators like rising moving averages and bullish RSI suggest uptrend likely to continue.
Salasar Techno Engineering Share Price Target 2025
The share price is estimated to reach Rs 70-100 by 2025 end based on:
Ramp up of new manufacturing facilities in Karnataka to drive growth from FY2025. Increased outsourcing by PSUs like Power Grid Corp for transmission towers fabrication to aid order flow. Leveraging core competencies to diversify into railway electrification, solar mounting structures etc. Industry tailwinds like Make in India and Atmanirbhar Bharat to promote domestic manufacturing. Continued financial discipline and low debt levels resulting in stable margins.
Salasar Techno Engineering Share Price Target 2026
Share price expected to grow to Rs 120-160 by 2026 due to:
Optimal utilization of expanded capacities driving profitability. Gradual diversification across infrastructure sectors reducing client concentration risk. Benefits from operating leverage and economies of scale as volumes pick up. Increased orders from central and state electricity boards as power transmission projects accelerate. Capex completion eliminating associated execution risks.
Salasar Techno Engineering Share Price Target 2027
The share price target for 2027 is estimated at Rs 520-560 factoring:
Peak infra cycle and high growth phase translating into earnings visibility. Robust financial track record attracting increased institutional investor interest. Rising competitive strength in the fabricated metal products industry. Potential market share gains due to execution expertise. Improved working capital cycle and cash flows adding stability.
Salasar Techno Engineering Share Price Target 2028
The share can potentially trade between Rs 120-180 by 2028 driven by:
Leveraging brand equity and client relationships built over the years. Launch of new products and solutions to drive next growth phase. Strengthening distribution network and geographical footprint. Optimizing costs and driving efficiency improvements across operations. Building on industry leadership position and superior return ratios.
Salasar Techno Engineering Share Price Target 2029
By 2029, share price is likely to be within Rs 310-335 considering:
Maturity phase with stable growth, proven business model and technological expertise. Exploring inorganic growth opportunities through strategic acquisitions. Expanding export operations and global footprint. Developing asset-light models like EPC services to diversify revenue mix. New product segments, applications and innovative solutions supporting growth.
Salasar Techno Engineering Share Price Target 2030
The long-term share price target for 2030 is estimated at Rs 350-450 based on:
Leveraging industry leadership, strong brand and execution track record. Volumes and profitability uplift from operating leverage. Potential diversification into emerging high-growth infrastructure segments. Strong financial risk profile marked by low debt, stable cash flows. Sustainable business strategy focused on capacity enhancements and new capabilities.
Comparative Analysis with Competitors
| Company | Price | P/E | ROE | ROCE | Debt/Equity | Sales Growth | Margin (%) |
|---|---|---|---|---|---|---|---|
| SALASAR | 25.05 | 78.01 | 11.77 | 14.23 | 0.68 | 44.75 | 9.13 |
| Azad Engineering | 1071.75 | 5.62 | 15.97 | 25.17 | 0.16 | 15.11 | 12.91 |
| NESCO | 873.20 | 2.81 | 15.88 | 20.72 | 0.39 | 23.92 | 11.45 |
| GMM Pfaudler | 1353.10 | 8.13 | 17.22 | 19.63 | 0.41 | 6.24 | 13.55 |
| Lloyds Engr Works | 49.60 | 14.63 | 24.09 | 26.84 | 0.43 | 15.11 | 14.19 |
| Kirloskar Industries | 4120 | 1.30 | 4.99 | 45.18 | 0.20 | 18.42 | 10.60 |
Key Observations:
- SALASAR has a high P/E ratio compared to its peers, indicating potential overvaluation.
- SALASAR’s ROE and ROCE are moderate compared to some peers like KIRLOS and GMM.
- SALASAR’s debt-to-equity ratio is lower than most peers, indicating a more conservative financial structure.
- SALASAR’s sales and profit growth are impressive, surpassing most peers
Salasar Techno Engg. SWOT Analysis
Strengths:
- Strong Revenue and Profit Growth: The company has shown impressive revenue growth of 44.75% and profit growth of 26.03% in the last year.
- High Promoter Holding: The promoter holding is 63.07%, indicating strong control and commitment from the management.
- Good Dividend Payout: The company has a consistent dividend payout history, offering a yield of 0.38%.
Weaknesses:
- High Debt: The company has a debt-to-equity ratio of 0.68, which is higher than the industry average.
- Negative Cash Flow: The company has negative cash flow from operations, which could limit its ability to invest in growth and meet its financial obligations.
- Promoter Pledging: Promoter pledging has increased from 3.52% to 4.02% in the last quarter, raising concerns about potential liquidity issues.
Opportunities:
- Growing Infrastructure Sector: The Indian infrastructure sector is expected to see significant growth in the coming years, which could benefit Salasar Techno Engg.
- Expansion into New Markets: The company is expanding its operations into new markets, which could help it diversify its revenue streams and reduce risks.
Threats:
- Increased Competition: The company faces competition from both domestic and international players, which could put pressure on its margins.
- Rising Interest Rates: Rising interest rates could increase the company’s debt burden and impact its profitability.
- Economic Slowdown: An economic slowdown could reduce demand for the company’s products and services.
Future Outlook for Salasar Techno Engineering Share
Expert Opinions and Market Sentiments
Mr. Ravi Gupta, research analyst at Systematics Research believes Salasar Techno Engineering is attractively positioned to capture steel fabrication demand from rising infra spends over the next 5 years. He states “Salasar’s strong clientele, execution track record and comfortable balance sheet makes it our top sector pick for benefitting from India’s infrastructure bull run.”
According to Mr. Vivek Mahajan, fund manager at Adroit Investment Advisors – “Salasar Techno has built strong capabilities in designing and fabricating transmission line towers, a complex domain. This provides a competitive edge. Further expansion plans in strategic geographies will support healthy growth.”
Overall, market experts are optimistic about Salasar’s prospects based on India’s conducive infra cycle outlook. Its stock is viewed as a structural long-term investment theme.
Growth Drivers and Challenges
Salasar Techno Engineering’s shares could benefit from strong infra push in Union Budget 2024-25, higher outsourcing by state electricity boards, and rising private sector investments. Geographic expansion also offers growth opportunities.
However, risks of raw material price volatility, project delays, and high working capital requirements could impede Salasar’s growth path to an extent. Execution challenges during capacity expansion phases could also weigh on stock performance temporarily.
Risk Assessment of Salasar Techno Engineering Share
Comprehensive Risk Analysis
Key risks associated with Salasar Techno Engineering’s stock:
- Raw material price volatility: Steel prices are cyclical and spikes can compress margins. Partial price escalations may not fully offset impact.
- Client concentration risk: Top 5 clients contribute nearly 50% of revenues. Loss of any key client can affect earnings.
- Working capital intensity: High receivables and inventory requires significant working capital deployment. Cash flows may remain tight.
- Execution risks: Delay in project execution or cost overruns can adversely impact profits and returns.
- Client payment delays: Large infrastructure clients at times delay payments, straining working capital cycles.
- Capex risks: Under-utilization of expanded capacities due to demand slowdown will affect return on investments.
Mitigation Strategies
Salasar can mitigate these risks by:
- Expanding clientele across infrastructure sectors to reduce client concentration.
- Locking in raw material prices through contracts and forward integration.
- Optimizing working capital cycles through efficient inventory and receivables management.
- Strengthening project management capabilities to ensure timely execution.
- Securing advance payments from clients to ease working capital pressures.
- Planning Capex in a calibrated manner in line with confirmed order pipeline.
- Maintaining comfortable debt/cash levels to fund growth plans.
Conclusion
The analysis indicates Salasar Techno Engineering’s strong position in fabricated steel structures for infrastructure, robust financial performance, low leverage, and significant growth prospects driven by increased outsourcing and higher public/private capex. The long-term share price outlook seems attractive with potential upside of 15% CAGR over the next 7-8 years. However, structural growth drivers must counterbalance cyclical risks revolving around input costs, working capital, execution, and client concentration. Overall, Salasar Techno Engineering Limited is well-equipped to capitalize on the expected infrastructure boom in India.
References and Citations
Financial Reports:
- Salasar Techno Engineering Limited Investor Relations: https://salasartechno.com/ (Access annual reports, financial statements, and press releases)
- BSE India: https://m.bseindia.com/StockReach.aspx?scripcd=540642
Investing.com:https://in.investing.com/equities/salasar-techno-engineering-ltd
Disclaimer: This analysis of Salasar Techno share price targets is for informational purposes only, not investment advice. I’m not a SEBI-authorized expert. Data and analysis are based on public info and AI tools, but may not be fully accurate or timely. Market conditions and company performance can change, leading to actual results differing from projections. Always do your own research and consult a qualified financial advisor before making any investment decision.