Standard Glass Lining IPO

Standard Glass Lining Technology has in-house capabilities to manufacture specialised engineering equipment that is needed for the production of active pharmaceutical ingredients (APIs) and fine chemical products. Over the past decade, the company has delivered more than 11,000 products.

The company’s customer base includes pharmaceutical and chemical companies like Apitoria Pharma, Aurobindo Pharma, CCL Food and Beverages, Cohance Lifesciences, Cadila Pharmaceuticals, Deccan Fine Chemicals, Dasami Lab, Laurus Labs, Granules India, Macleods Pharmaceuticals, MSN Laboratories, Natco Pharma, Honour Lab, Hetero Drugs, Hetero Labs, Hazelo Lab, Piramal Pharma, Sanvira Biosciences, Suven Pharmaceuticals, Tagros Chemicals, Vamsi Labs, and Viyash Life Sciences.

Standard Glass Lining Technology has an agreement with HHV Pumps Private Limited for vacuum pump supply and private labelling. Additionally, the company collaborates with Japan-based Asahi Glassplant Inc. and GL Hakko Co. Ltd to procure specific grades of glass for its glass lining division. These partnerships have helped solidify the company’s position in the glass lining and vacuum pumps market in India.

As of September 30, 2024, the company offers a diverse portfolio of more than 65 products for the pharmaceutical and chemical sectors.

The company’s manufacturing facilities are capable of producing up to 100 reactors per month, 30 Agitated Nutsche Filter Dryers (ANFDs) per month, and 9,000 units of polytetrafluoroethylene (PTFE)-lined pipes and fittings a month.

The company’s manufacturing facilities are equipped with technologies such as 3D computer-aided design (CAD), robotic welding, and precision computer numerical control (CNC) manufacturing.

The company has seen a consistent increase in revenue from operations and profit after tax (PAT). Revenue from operations increased from Rs 240.19 crore in FY22 to Rs 497.59 crore in FY23 to Rs 543.67 crore in FY24. PAT increased from Rs 25.14 crore in FY22 to Rs 53.42 crore in FY23 to Rs 60.01 crore in FY24.

Standard Glass Lining Technology relies entirely on its manufacturing facilities located in Telangana, India. Any adverse developments leading to a slowdown or sudden shutdown in the operations of the facilities could negatively impact the company’s business and financial condition.

The company depends on a limited number of suppliers for key raw materials, including stainless steel, carbon/mild steel, nickel alloy, forgings, castings, chemicals, and PTFE powder. A loss of any of these suppliers or a delay in procurement of the materials could adversely affect the company’s operations and finances.

The company generates a major part of its revenue from two main sectors – pharmaceuticals and chemicals. The pharmaceutical sector contributed Rs 230.70 crore (75.10%) for the six months ended September 30, 2024, and Rs 444.67 crore (81.79%), Rs 411.98 crore (82.80%), and Rs 205.43 crore (85.53%) in FY24, FY23, and FY22, respectively, to the revenue from operations. The chemicals sector contributed Rs 40.24 crore (13.10%) for the six months ended September 30, 2024, and Rs 68.17 crore (12.54%), Rs 71.34 crore (14.34%), and Rs 32.45 crore (13.51%) in FY24, FY23, and FY22, respectively, to the revenue from operations. The company is dependent on the sound performance of these sectors. Any sudden adverse changes in these sectors could hit the company’s revenue generation capability, affecting its financial standing.

As of September 30, 2024, the company had total consolidated borrowings of Rs 198.33 crore. Any inability to repay or service these loans could harm the company’s financial position.

The company has contingent liabilities amounting to Rs 49.60 crore as of September 30, 2024. If these liabilities materialise, they could pose a significant risk to the company's finances.

The company’s revenue is dependent on a few customers. The top 10 customers contributed Rs 156.86 crore (51.06%) for the six months ending September 30, 2024, and Rs 220.51 crore (40.56%), Rs 268.06 crore (53.87%), and Rs 115.49 crore (48.08%) in FY24, FY23, and FY22, respectively, to the revenue from operations. A loss of any of these customers or a reduction in business from any of them could adversely affect the company’s operations and finances.

The company’s revenue is heavily dependent on the Indian market, which contributed Rs 288.83 crore (94.02%) for the six months ended September 30, 2024 and Rs 541.63 crore (99.63%), Rs 496.25 crore (99.73%), and Rs 239.60 crore (99.76%) in FY24, FY23, and FY22, respectively, to the revenue from operations. This reliance on India-specific market dynamics increases exposure to regional risks and may affect the company’s ability to diversify and sustain long-term profitability.

The company, its promoters, subsidiaries, and directors are involved in certain legal proceedings. Any adverse judgment in any of these cases could hurt the company’s business prospects.