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Salzer Electronics expands into smart meter manufacturing addressing India’s growing energy management needs

22 February 20244 mins read by Angel One
The company’s shares have delivered a remarkable return of around 500% to their shareholders in the past three years.
Salzer Electronics expands into smart meter manufacturing addressing India’s growing energy management needs
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Salzer Electronics offers total and customised electrical solutions in switchgear, wires, and cables, as well as the energy management business.

The company has taken a significant step towards modernising India’s energy infrastructure by announcing the establishment of a cutting-edge Smart Meter manufacturing plant in Coimbatore. The move aligns with the company’s commitment to providing innovative electrical solutions and comes at a time when the demand for Smart Energy Meters in India is poised for exceptional growth.

Strategic Edge

The newly announced Smart Meter factory is strategically positioned as it is backward integrated with Salzer’s existing Coimbatore facilities. These facilities have been crucial in manufacturing electrical components for Smart Meters, giving Salzer a distinct advantage in terms of cost control, efficient supply chain management, and quality assurance for Smart Meters. This integration demonstrates the company’s forward-thinking approach to addressing the evolving needs of India’s energy sector.

Production Capacity and Employment Opportunities

The Smart Meter manufacturing plant is expected to have an annual production capacity of 4 million smart energy meters in its initial phase, with plans to increase this to 10 million in Phase Two. The expansion is not only a testament to Salzer’s dedication to meeting the rising demand for Smart Energy Meters but also a significant contributor to the local economy. The facility is projected to employ approximately 1000 people at full capacity, contributing to job creation in the region.

Addressing India’s Growing Demand

India is experiencing a surge in demand for Smart Energy Meters, driven by the Revamped Distribution Sector Scheme (RDSS) launched by the Government of India. The scheme aims to initially deploy 250 million Smart Energy Meters initially, with the potential to increase to 350 million meters in the next three years. Salzer Electronics, well aware of this growing demand, is strategically positioned to play a pivotal role in supporting India’s energy management needs.

Market Projections

According to Astute Analytica, the India Smart Meter market is anticipated to reach USD 3.27 billion by 2031, growing at a compound annual growth rate (CAGR) of 34.57% from 2023 to 2031. Salzer’s foray into Smart Meter manufacturing positions the company to capitalize on this significant market opportunity while contributing to the nationwide effort to enhance energy efficiency and management.

Share Performance

At the beginning of the day, it opened almost flat at Rs 574 per share on the BSE, hitting intraday highs and lows of Rs 598.45 and Rs 545, respectively. Currently, it is trading at Rs 592.30 per share, reflecting a .30% decrease from the last day’s closing price.

Furthermore, the company’s stock has generated a negative return of around 161% in the past month and an impressive return of around 340% in the past years. Comparing these returns with the benchmark return has shown outperformance and the ability to beat the Sensex return.

The current market capitalisation of the company stands at Rs 1,044 crore.

Dolly Khana Stake

In terms of ownership, the promoter holds 37.21% of the company. Foreign Institutional Investors (FIIs) and Domestic Institutional Investors (DIIs) hold 3.93% and 0.14%, respectively. The majority, accounting for 58.73%, is held by public investors.

Among these, 58.73% of the stake is held by public investors. Super Investor Dolly Khanna holds a 1% stake in the company as of September 2023.

Investors should keep this stock on their radar.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.

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