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00:00Subscription opens today closes on the 30th of September again not a very big
00:05issue it's about a hundred fifty eight crores the issue price is the range of
00:09159 to 168 per piece at 168 rupees the market cap of the company comes in about
00:15the total comes in about 700 odd crores well what you want to remember is what
00:21are they going to do with this money right so very important to identify
00:23where that money that they're raising is going to be spent they will be funding
00:27capital capital expenditure requirements going ahead towards
00:31expanding facilities they already have four facilities they may look at getting
00:36on some more facilities with the money that they're raising and the rest of it
00:40would be used for working capital requirements now what does diffusion
00:43engineers do like I said it's an interesting business may be difficult to
00:47comprehend but let's try and see and understand what the company really does
00:51they provide a super conditioning process at its four manufacturing
00:56facilities in and around a couple of them are in Nagpur it provides surface
01:01treatment solutions or machine components that enhance wear resistance
01:05eliminates stress and improve repair ability and sustainability of machines
01:10so the job or their revenue really comes in from clients clients who are looking
01:16at OPEX so it's not about new facilities coming on board but for healthy
01:20maintenance of existing machinery is the kind of work that diffusion engineers
01:25provides numbers were good revenues were up about 9% so not massive but a
01:30good healthy growth why why profits saw a big jump that jumped about 39% margins
01:35also improved significantly profits came in at about 30.8 crores now why should
01:41you be concerned or what should you keep in mind 90% of diffusion engineers
01:45business comes from Indian clients which means they do very little exports any
01:50changes in the domestic market could impact them significantly because their
01:54revenue book is not very diversified they also have some years when we've
01:59seen negative cash flow for the company those could be in down periods that in
02:04the industry and that has been visible but remember for a listed entity you
02:09want to try and maintain a sustainable you know predictable cash flow in that
02:14sense so that's the other factor to keep in mind and like we said it's a high
02:18working capital business so the time and again require working capital which is
02:23fairly large some part of the fundraiser they're doing through the IPO
02:27will be used to be kept aside for working capital and they'll also retire
02:31some debt all that together should garner well for diffusion engineers