This is a very high risk, illiquid microcap company.

Fluidomat is a completely debt free 53 years old company engaged in manufacturing fluid couplings and flexible couplings and one of the leading manufacturer of fluid couplings in the country.

Fluidomat Ltd

Current Market price on the date of publishing this report- 239 Rs

Introduction

Incorporated in 1975, Fluidomat manufactures fluid couplings and flexible couplings at its plant at Dewas, MP which has an installed capacity of 1500 couplings to manufacture a limited range of couplings (11 models). With the indigenous technology developed by the company after continuous R & D efforts, it enjoys the status of a leading manufacturer of fluid couplings in the country.

A project order from MECON for the TNEB-North Chennai External Coal handling Plant was acquired by the company in 1998–1999. The order was successfully performed and has a value of about Rs. 105 Lacs.

A broad variety of fixed speed and variable speed fluid couplings for industrial and automotive drives up to 3500 KW are produced by Fluidomat Limited, an ISO 9001:2015, ISO 14001:2015, and OHSAS-ISO 45001:2018 Certified Company.

Company has total strength of 275 employees. Modern in-house Non Ferrous and Cast Iron Foundries produce high quality intricate castings required for Fluid Couplings. The fluidomat factory at Dewas, near Indore in Central India, is equipped with sophisticated manufacturing, research and development, quality control and testing facilities to ensure quality and consistency.

There are 275 people working for the company in total. The precise castings needed for fluid couplings are produced by modern internal non-ferrous and cast iron foundries. To guarantee quality and consistency, the fluidomat facility in Dewas, close to Indore, in Central India, is outfitted with cutting-edge production, research and development, quality control, and testing facilities.

Clients may get assistance from

with application engineering, driving solutions, and energy conservation. The company has accumulated extensive application engineering knowledge thanks to the couplings’ successful performance in practically all industrial areas.

Sectors which company deals in

Due to its capacity to minimise production-related effects while boosting manufacturing efficiency, Fuidomat is a preferred choice for industrial clients.. Company caters to a wide variety of sectors such as

Business

What are variable speed couplings used to do?

Fluid couplings with variable speeds have the potential to reduce the energy required for both the operation of motors and the driven equipment. By lowering the power necessary to run the pump at a lower point along its intended performance curve, more savings can be made.

Constant fill / Fixed speed coupling

Fluidomat offers three circuit types to provide beginning torque as low as 120% of nominal torque in order to fulfil the starting and operating characteristics of industrial machines.

Variable speed scoop coupling

When linked to a fixed speed electric motor, FLUIDOMAT-SC is a variable speed fluid coupling that offers stepless speed variation across a large range. By changing the oil filling in the coupling through a sliding scoop tube while it is in use, the speed variation is produced. As it may react to a variety of electric, pneumatic, or hydraulic signals and is compatible with all sorts of controllers, including pneumatic, hydraulic, electronic, electrical, and manual, it gives versatility in controls. In addition, it provides all the benefits of constant speed fluid coupling, including load limitation, shock and vibration absorption, torsional load absorption, and smooth acceleration. Its built-in safety features make it impenetrable when in use.

Fluid couplings with variable speeds have the potential to reduce the energy required for both the operation of motors and the driven equipment. By lowering the power necessary to run the pump at a lower point along its intended performance curve, more savings can be made.

FNCT fill control coupling

For big drive motors, FNCT Fluid Couplings that function on the basis of hydrodynamic power transfer with fill control are excellent as startup and acceleration control devices. They add to the safety of drive motors and torque gearbox control when used in conjunction with electronic control.

Applications The FNCT couplings may be utilised for a wide range of tasks, including starter work and smooth, controlled acceleration of large loads and inertia.ideally suited for use with belt and pipe conveyors.

Typical applications include

• Belt conveyor soon underground mines or on surface installations.
• Pipeconveyors.
• Crushers.
• Balland Rod Mills.
• Shredders.
• Armored Face Conveyors(AFC).
• Mixers.
• Beaters.
• Other typical applications.

FNIC: Drain type fluid couplings for internal combustion engines

Fluidomat FNIC are drain nozzle type fluid coupling suitable for Combustion Engine Drive.

Operation

Oil flows into the working circuit during Power Transmission (clutching) operation through an oil cooler, filter, and solenoid valve. Working circuits constantly leak hot oil into the oil sump.

Order Book

The opening balance of pending orders was Rs. 40.61 crores as on 1st April, 2022 with strong order booking during current financial year the Company stands at better order position compared to financial year 2021-22.

More details about the current order book can be found in the upcoming annual report.

Clients

The Co serves a wide array of industries such as Logistics, Steel, Cement, Paper etc. Its prominent clients include Adani Ports and Logistics, Hindustan Zinc Limited, NALCO, Orient Paper, TRF, UltraTech Cement etc.

Financials

For the year ended March 23

• Company generated total revenue from operations of Rs. 35.65 crs as against Rs. 29.62 crs in the previous financial year 2020-21 representing increase in total revenue of 20.35 %.
• Company has booked the orders of Rs. 41.25 crs during the current financial year as against the order booking of Rs.38.56 crs in the previous financial year, which was higher by 6.95%.
• During the year ended on March 31, 2022 the Earnings before Interest, Depreciation and Tax (EBIDTA) had been increased to Rs. 7.76 crs as against the EBIDTA of Rs. 6.05 crs in the corresponding previous financial year.
• The Net Profit of the Company for the financial year 2021-22 has been increased to Rs. 5.75 crs as compared to Rs. 4.39 crs during the previous financial year.
• Earning per share (EPS) for the year increased to Rs. 11.68 as compared to EPS of Rs. 8.93 in previous financial year.

Source – Company annual report for 2021-2022

For Q3 FY23

• Net Sales stood at Rs 9.92 crore in December 2022 up 14.23% from Rs. 8.69 crore in December 2021.
• Quarterly Net Profit stood at Rs. 1.71 crore in December 2022 up 22% from Rs. 1.40 crore in December 2021.
• EBITDA stood at Rs. 2.45 crore in December 2022 up 15.57% from Rs. 2.12 crore in December 2021.

Sectorial Outlook

In contrast to the global economy, India’s economy is considerably stronger and expanding. There is a lot of demand in the nation as a consequence of the Union Government’s many initiatives, including investments in infrastructure projects. The slowdown in Europe has given the Indian engineering industry a chance to sell to diverse nations, including those in Africa, the Middle East, and the Pacific, and to provide Indian goods to those nations. For simple international expansion, the company has translated its product catalogues into a number of different languages.

The company only operates in one market, the production and sale of high-tech products called “Fluid Couplings” that are primarily used in a variety of industries, such as Thermal Power Plants, Steel, Metal, Cement, Paper, Chemical, Fertilisers, Coal and Ore-mining, and Port handling facilities, among others. New initiatives in these industries make a significant contribution to the company’s expansion and profitability.

Conclusion

Manufacturing fluid couplings and flexible couplings for more than 53 years, Fluidomat is an experienced, debt-free company. It is one of the top producers of fluid couplings in the country and maintains a constant order book. The company has consistently worked to increase operational margins, and as a consequence, over the past three years, net profit has increased at an amazing 30% CAGR. Fluidomat’s potential for development is encouraging despite a modest 7% CAGR increase in sales over the same time, particularly with the government’s Make in India push fueling industrial activity in the country.However, new investors need to be aware of the main risk concerns for the company, which include its extremely low equity capital, the lack of liquidity in its stock, and its placement in the T group on the BSE trading. Investors should also anticipate an extended gestation time before any material gains are realised because the company is a microcap one. Therefore, only those who are prepared to remain persistent over an extended period of time and accept the chance of financial loss should think about investing in this kind of business. It is best to avoid over positioning with these kinds of companies.