Paramount Speciality Forgings Limited
Company
| Website 🔗 |  |
| Business Activity | Manufacture |
| Division | Metal/Steel Forgings |
| Sub-class | Open Die Forging and Closed Die Forging |
| Location | Kamothe, Maharashtra Khalapur, Maharashtra |
| Establishment Year | 1994 |
Management
| Managing Director | Aliasgar Roshan Hararwala |
| Educational Qualifications | Diploma in Business Entrepreneurship from Burhani Institute of Business Entrepreneurship |
| Experience | Over 27 years of experience in the steel forging industry |
| Annual Salary | ₹ 21 Lakhs |
| Total Number of Employees | 155 |
About
Paramount Speciality Forgings Limited (PSFL) manufactures and supplies a diverse range of forged products, catering to the extensive requirements of various sectors, including petrochemicals, oil and gas, nuclear power, and heavy engineering.
Products and Services:
Paramount Speciality Forgings manufactures a wide range of forged products, including:
- Tube Sheet Blanks
- Forged Rings
- Spacers
- Girth Flanges
- Tyre Rings
- Self-reinforced nozzle
- Long weld neck flanges
- Seat
- Valve’s body
- Bonnet
Clients:
The company’s products are used in a wide range of applications in the following industries:
- Petrochemicals, Chemicals and Fertilizers
- Oil and Gas
- Nuclear and Power
- Heavy Engineering
Manufacturing Process:
Closed Die Forging:
The Closed Die Forging Plant shop is equipped with two pneumatic air hammers 2T and 5T and a Drop Forge Hammer of capacity 1.5 MT that are capable of producing single-piece forgings weighing up to 120 Kgs.
Open Die Forging:
Forgings are produced using Open Forging under a Hydraulic Press.
Automated Ring Rolling Mill:
The company has an Automated Ring Rolling Mill with the capability of forging seamless rolled rings up to a diameter of 3500mm, a height of up to 750mm and a weight of up to 4 MT.
Raw Materials:
The principal raw materials used in the company’s manufacturing process include Ingots, Rounds, Plates, Billets, and Bars.
Other Key Aspects:
2022-23: Awarded for bright beginner performance from Kirloskar Group
ISO 9001:2015: Certified by TUV NORD for its quality management system.
Business Process Flowchart
Revenue – Category
Revenue – Region
Audit and Legal
Auditor’s Remarks:
The auditors have issued an unqualified opinion on the company’s financial statements
Non-Compliances and Other Issues:
There are no actions taken by the regulatory and statutory authorities against the company. However, two notices were issued by the ESIC department. One on April 25, 2024, for a deficit in contribution to the ESI Fund of ₹16,743 and another on April 2, 2024, for ₹86,628.
Contingent Liabilities:
As of FY 2024, Paramount Speciality Forgings Limited has the following contingent liabilities that have not been provided for in its financial statements:
- Guarantees given by the Company to the bankers against which fixed deposits have been placed with the bank under lien: ₹115.16 Lakhs
Legal Cases:
Cases Filed Against the Company
As of FY 2024, there are no cases filed against the company.
Cases Filed by the Company
As of FY 2024, there are no cases filed by the company.
Tax Proceedings against the Company:
As of FY 2024, no indirect tax matters are pending against or by the Company.
Aggregate outstanding demand for various years concerning direct tax matters is ₹25,98,739
SWOT Analysis
Strengths
| Long-standing client relationships: The company has a history of customer retention and repeat business, which has contributed to the growth of its revenues. |
| Track record of consistently building capabilities and infrastructure, with a focus on capital efficiency: The company has a proven track record of expanding and upgrading its manufacturing facilities and processes to meet the needs of its customers. |
| Track record of financial performance and consistent growth: The company has a track record of strong financial performance. |
Weaknesses
| Dependence on a limited number of suppliers: The company sources the majority of its raw materials from a limited number of suppliers, which could lead to supply chain disruptions. |
| High levels of inventory: The company maintains a high level of inventory, which could lead to losses if demand for its products declines. |
| No long-term contracts with customers: The company does not have any long-term contracts with its customers, which could lead to fluctuations in its revenues. |
Opportunities
| Expansion into new markets: The company can expand its sales into new geographic markets. |
| Expansion of product portfolio: The company can expand its product portfolio to offer a wider range of forged products. |
| Acquisition of new customers: The company can acquire new customers by bidding for contracts from government entities and by expanding its sales and marketing efforts. |
| Increased adoption of automation: The company can increase its adoption of automation in its manufacturing processes to improve efficiency and reduce costs. |
Threats
| Competition from other forging companies: The forging industry is highly competitive, and the company faces competition from several other companies. |
| Volatility in raw material prices: The prices of raw materials, such as steel, are volatile and could fluctuate significantly, which could have a material adverse effect on the company’s business. |
| Economic slowdown: An economic slowdown in India or the global economy could have a material adverse effect on the company’s business. |
Porter’s Five Forces1
| Threat of New Entrants | MODERATE |
| The forging industry requires significant capital investment in specialized equipment and skilled labour, which can act as a barrier to entry. However, there are opportunities for new entrants with innovative technologies or niche specializations to enter the market. |
| Bargaining Power of Suppliers | MODERATE |
| The company sources raw materials from both domestic and international suppliers, providing some flexibility in its supply chain. However, the reliance on a limited number of suppliers for a substantial portion of raw materials can increase supplier bargaining power and potential price volatility. |
| Bargaining Power of Buyers | MODERATE |
| The company serves a range of industries with varying buyer concentration levels. Some industries, like petrochemicals and oil & gas, have larger buyers with greater bargaining power, while others have more fragmented buyers with less influence on pricing. |
| Threat of Substitute Products or Services | LOW |
| Forged components offer unique properties in terms of strength, durability, and reliability, making them difficult to substitute, especially in demanding applications. Alternative manufacturing processes, such as casting or additive manufacturing, may exist but often cannot match the quality and performance of forged components. |
| Rivalry Among Existing Competitors | HIGH |
| The forging industry is highly competitive and fragmented, with numerous players vying for market share. |
Peer Comparison
There are no listed companies that engage in a business similar to that of Paramount Speciality Forgings Limited.
Green Box
Strong financial performance:
PSFL has demonstrated consistent revenue growth and profitability, indicating its ability to compete effectively in the market.
Research and Development:
In FY 2024, PSFL’s revenue from new products and services was ₹1,209 Lakhs, which represented 10.76% of its total revenue. This shows that PSFL’s R&D efforts have successfully generated new revenue streams for the company.
IPO Funds:
Funding capital expenditure requirements:
The company plans to use the proceeds of the IPO to fund the purchase of new machinery and equipment for its manufacturing facilities. This will allow the company to increase its production capacity and expand its product portfolio.
Industry Outlook:
The Indian metal forging market is projected to grow from $4.32 billion in 2022 to $8.80 billion by 2029, at a CAGR of 10.69% in the forecast period, 2022-2029. Sources and related content
Growth of the forging industry:
The forging industry is expected to grow significantly in the coming years, driven by increasing demand from various sectors such as automotive, aerospace, and defence. As a leading player in the forging industry.
Amber Box
Capacity Utilization:
As of March 31, 2024, the current capacity utilization rate of the company is 41.24%.
Negative Operating Cash Flow:
PSFL had negative operating cash flow for FY 2024.
Red Box
Debt-to-equity ratio 1.09
Volatility in raw material prices:
The prices of raw materials, such as steel, are volatile and could fluctuate significantly. Any significant increases in the prices of raw materials could have a material adverse effect on the company’s business.
Economic slowdown:
An economic slowdown in India or the global economy could have a material adverse effect on the company’s business.
Images
- The force value of “LOW” is considered good Click Porter’s Five Forces article for more information. ↩︎
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