June 2022
Sample Size: 23 Companies
Median Rating Value of sample size: BBB+
Individual Parameters Contributing to the Score
Moderate Over Supply
With limited capital expenditure by the corporate sector over the last 2 years, there has been a significant impact on the order book of industrial machinery manufacturers. As per CMIE data, the industry reported y-o-y 30.9% growth in sales from Rs.34.2 billion for March 2021 quarter to Rs.44.8 billion during the quarter ended March 2022. In FY22, the exports value of Chemical Machinery and Printing Machinery increased by 30% and 32.48% respectively as compared to FY21.
Neutral
There are entry barriers in terms of access to technology; the industry has few but established players.
Predictable Regulatory environment
Indigenisation efforts to set up greenfield and brownfield plants for lower dependence on imports of manufactured and industrial products are likely to be supported and facilitated by the government. This should also improve the demand scenario for the sector.
Largely predictable supply of inputs from diversified sources or Raw Materials with rare, occasional disruptions / fairly predictable price band
The availability of raw materials such as steel is not a challenge but the profitability is vulnerable to any increase in prices.