Shaily Engineering: Conference Call Updates

Shaily Engineering Plastics Ltd


Key highlights

  1. One can expect 548 to 616 Cr of annualized revenue from Q4 FY-22 onwards.
  2. Carbon steel furniture, Toys and Plastic furnishing will ramp up from Q4 onwards.
  3. Anil Kalra, CEO gave his resignation due to health reasons.



Quarterly Performance



 Annual performance

Carbon steel furniture helped to get more revenues.

EBITDA margins were impacted in H2, post removal of MEIS benefit from the government.




  • Healthcare is now the 2nd largest revenue contributing segment
  • Added 12 Drug Delivery devices in commercial production
  • Built high scale to be able to achieve 2-3x revenue growth (35 to 45%) in 3-5 years
  • In 2022, 3 more platforms will get commercialized in auto-injectors and pen injectors
  • Significant ramp up in next 2-3 years.



  • Platform for Autoinjector and Pen injector. The opportunity size is very large.
  • If you remove insulin then the market size of auto and pen injector is $9.5 bn.
  • The average price of $3.
  • Target market: 30 million pens.
  • Shaily is planning to capture 10-15 mn of market share.
  • Insulin is a Massive opportunity. Market size: 10-50 mn


Shaily’s performance

  • Current sales: 100k to 0.5 mn pens
  • Next year: 3 mn (based on 2 molecules)
  • 2024: Substantial ramp up. (once the customer capture global market share on these molecules)



Home furnishing

  • Revenues increased from Rs. 120cr in FY15 to over Rs. 200cr in FY21
  • Scaled up from 18 SKU’s in FY17 to supplying ~48 SKU’s currently
  • Started with a value of Rs. 1cr and currently have orders worth more than ~Rs. 200crs
  • Supplies across the Globe to different segments: Kitchen, Children’s, Cooking & Eating, Organizing & Storage



Carbon Steel furniture

  • Started commercial production in Q3FY21
  • Project delayed due to COVID.
  • As utilization levels pick up, the EBITDA margins will improve further.




  • Entered in toys business 1.5 years back.
  • Added Spin Master as our 1st client in Toys Business. Company is regarded amongst the top toy companies in the world
  • Shaily received first order from Spin Master during Q 1FY20
  • Initial shipments were made in Q 3FY20
  • Expect to further ramp up this business in FY22

Production update

  • Started production of 2 products for one of the top 3 global toy brands.
  • The production will ramp up further in 2022.


  • Opportunity is as large as our appetite. Can be as big as the home furnishing major in the next 4-5 years.




  • Started construction of new plastic plant at Halol.
  • The plant will be operational in H1 FY-22.
  • This plant will help Shaily serve the new order from Home Furnishing Major.



  • 24-25 customer apart from Pharma.
  • Top 6 or 7 customers account for 85% of revenue
  • Once we acquire a customer, there has been no instance since the last 32 years where Shaily has lost a customer.
  • Typically the relations are long term in nature.


Business update

  • Getting complex projects as well.



  • 2021: 72 Cr
  • 2022: 80-90 Cr. New plastic facility and Pharma facility.
      • Plastic facility will start delivering in 2022
      • Pharma will be a slow ramp up.
  • 2023 onwards: 70 Cr


A large part of CAPEX plans will be based on the business confirmation from customers.

So apart from the pharma facility, the other facility will get ramped up significantly in Q4. Post which if Shaily gets new orders then they will have to put up new capacities.



Asset turns

  • Peak asset turns: 2 to 2.5x



  • Anil Kalra, CEO gave his resignation due to health reasons. Got hospitalized in march due to COVID and is still facing health issues.
  • Looking for a new CEO.




  • Debt will peak out in the current quarter. After this quarter the absolute debt will reduce. And the D/E and ICR will also improve as the business scales up.




  • Total blockage on account of GST and MEIS is 17 Cr.
  • Management doesn’t have much clarity on RoDTEP.
  • Total benefit last year: 5 Cr


Working capital

  • Gone up due to blockage of funds in MEIS and GST.
  • Overall inventory level has gone up due to the toys segment. As the supplies ramp up the inventory days will improve.
  • Normalized WC days: 75-85 days


Fy-21 order wins

  • Toys: 70-80 Cr
  • Furnishing: 180 Cr
  • Carbon steel furnishing: 100 Cr



  • Toys, plastic and steel Will run at peak potential In Q4 of FY-22.
  • Peak revenue from new orders will be in Q4 FY-22
  • One can expect asset turns of 2 to 2.5x.
  • New assets that will commercialize in H1: 40 Cr
  • In the long term Margins are sustainable and will grow in coming years




Market cap: 951 Cr

Total fixed assets in H2: 274 Cr

Case 1: Asset turns at 2x (Conservative basis)

Annualized PAT on a 550 Cr revenue (2x asset turns) with 17% EBITDA margin (conservative estimate) is 43.5 Cr (assuming 25% tax rate)


  • P/E: 22x
  • EV/EBITDA: 12.05x


Case 2: Asset turns at 2.25x

Annualized PAT on a 616 Cr revenue (2.25 asset turns) with 17% EBITDA margin (conservative estimate) is 52 Cr (assuming 25% tax rate)


  • P/E: 18x
  • EV/EBITDA: 10.73x




Disclaimer: We are not SEBI registered and views may be biased. Valuation was not a part of the concall. And revenue calculation will vary from that of the concall.

Read us more on Shaily here.

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