GMM PFAUDLER
All the Acquisitions done by GMM Pfaudler in the last 2-3 years are MARGIN DILUTIVE.
1.Acquistion of stake in parent Pfaudler
Pfaudler EBITDA Margins -10%
GMM DOMESTIC EBITDA Margins -25%
Completely Margin Dilutive
Just Expanding Market Opportunity size
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All the Acquisitions done by GMM Pfaudler in the last 2-3 years are MARGIN DILUTIVE.
1.Acquistion of stake in parent Pfaudler
Pfaudler EBITDA Margins -10%
GMM DOMESTIC EBITDA Margins -25%
Completely Margin Dilutive
Just Expanding Market Opportunity size
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1.
Acquistion of De Dietrich Process Systems
Aim : To Increase the market share in GLASS LINED EQUIPMENT(GLE)
As a result of this acquisition,GMM Pfaudler market share in DOMESTIC GLE stands at 58-60% .
Market Size : 1300 crores
Acquistion of De Dietrich Process Systems
Aim : To Increase the market share in GLASS LINED EQUIPMENT(GLE)
As a result of this acquisition,GMM Pfaudler market share in DOMESTIC GLE stands at 58-60% .
Market Size : 1300 crores
2.
Issue with this Acquistion :
De Dietrich sold to Gmm pfaudler beacuse of unviable cost structures and Losses in some years.
Again,LOWER EBITDA Margins compared to GMM Pfaudler's DOMESTIC EBITDA Margins(25%)
Issue with this Acquistion :
De Dietrich sold to Gmm pfaudler beacuse of unviable cost structures and Losses in some years.
Again,LOWER EBITDA Margins compared to GMM Pfaudler's DOMESTIC EBITDA Margins(25%)
3.
Acquisition of INDUSTRIAL MIXING DIVISION(NON- GLASS LINED EQUIPMENT)(NGLE) of Sudarshan Chemicals for 29 crs
Aim :
a. To Diversify product portfolio from GLE Segment
b. To increase the proportion of overall share of NGLE to Revenues
c.Incremental Opportunity in NGLE seg
Acquisition of INDUSTRIAL MIXING DIVISION(NON- GLASS LINED EQUIPMENT)(NGLE) of Sudarshan Chemicals for 29 crs
Aim :
a. To Diversify product portfolio from GLE Segment
b. To increase the proportion of overall share of NGLE to Revenues
c.Incremental Opportunity in NGLE seg
4.
Issue :
Already Subsidiary MAVAG has MIXING DIVISION
Again Acquired MIXING DIVISION of Sudarshan chemicals
May be one is for Domestic and other is for International.
By Focusing on NGLE,it is bound that Company will report LOWER EBITDA MARGINS than Standalone GMM marguns
Issue :
Already Subsidiary MAVAG has MIXING DIVISION
Again Acquired MIXING DIVISION of Sudarshan chemicals
May be one is for Domestic and other is for International.
By Focusing on NGLE,it is bound that Company will report LOWER EBITDA MARGINS than Standalone GMM marguns
5.
Why the GMM PFAUDLER does this Acquistions ??
Firstly,GMM present in TWO SEGMENTS
1. Glass Lined Equipment(GLE)
Domestic Market share of 58-60%
International market share at 20%
2.Non- Glass Lined Equipment(NGLE)
Had presence in
a.Heavy Engineering
b.Proprietary products
Why the GMM PFAUDLER does this Acquistions ??
Firstly,GMM present in TWO SEGMENTS
1. Glass Lined Equipment(GLE)
Domestic Market share of 58-60%
International market share at 20%
2.Non- Glass Lined Equipment(NGLE)
Had presence in
a.Heavy Engineering
b.Proprietary products
6.
By Acquiring the stake in PARENT PFAUDLER,it want to increase the addressable market size of GLE business,because domestic GLE business is only 1300 crs.
By acquiring the Die dietrich,it want increase the MARKET SHARE in DOMESTIC MARKET
By Acquiring the stake in PARENT PFAUDLER,it want to increase the addressable market size of GLE business,because domestic GLE business is only 1300 crs.
By acquiring the Die dietrich,it want increase the MARKET SHARE in DOMESTIC MARKET
7.
Both are good,but COMPROMISING on MARGINS.
The mgmt also want to grow the NGLE business to avoid the Cyclicality in GLE business.
To boost NGLE business,Mgmt has acquired MIXING DIVISION of sudarshan chemicals.
This is in line with mgmt strategy to boost NGLE business.
Both are good,but COMPROMISING on MARGINS.
The mgmt also want to grow the NGLE business to avoid the Cyclicality in GLE business.
To boost NGLE business,Mgmt has acquired MIXING DIVISION of sudarshan chemicals.
This is in line with mgmt strategy to boost NGLE business.
8.
While it givea ACCESS to SUPERIOR TECHNOLOGY and FOREIGN MARKETS implying HIGH REVENUES,it comes with LOWER EBITDA Margins.
Mgmt has alot to do with Integration and enavle these Acquired companies to perform better in terms of financial metrics INSTEAD OF DRAGGING THE MARGIN
While it givea ACCESS to SUPERIOR TECHNOLOGY and FOREIGN MARKETS implying HIGH REVENUES,it comes with LOWER EBITDA Margins.
Mgmt has alot to do with Integration and enavle these Acquired companies to perform better in terms of financial metrics INSTEAD OF DRAGGING THE MARGIN
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