Profile of the company
The company was originally incorporated as Nitiraj Engineers Private Limited under Part IX of the Companies Act, 1956 and the Certificate of Incorporation was issued by the Assistant Registrar of Companies, Maharashtra, Mumbai on April 1, 1999. Subsequently, the company was converted into a Public Limited Company pursuant to Shareholders’ Resolution passed at the Extra Ordinary General Meeting of Members of the Company held on June 8, 2015 and the name of the company was changed to Nitiraj Engineers Limited vide a fresh Certificate of Incorporation dated June 22, 2015 issued by the Deputy Registrar of Companies, Maharashtra, Mumbai. The Registered Office of the company is located at Mumbai and Corporate Office is located at Dhule in the State of Maharashtra.
The company’s products are manufactured at its manufacturing unit located at Parwanoo, Himachal Pradesh. The company also has manufacturing facility at Silvassa, UT which is not under active use currently. The company supply’s its products under the brand PHOENIX through its large network of dealers to its customers in India as well as abroad.
The company is already supplying machines to various state governments under CGMS program. These machines have advanced technology support in form of data collection, plotting, MIS and dissemination. With the help of technology the task of record keeping, plotting, data management and reporting can be handled by the weighing machine systems itself. This provides the field staff and supervisory staff to focus on actual action points to achieve objectives of CGMS and ICDS rather than spending time on data management.
Proceed is being used for:
Growth Monitoring (GM) is the process of following the growth rate of a child in comparison to a standard by periodic, frequent anthropometric measurements in order to assess growth adequacy and identify faltering early. It is a measurement of a child to determine levels of malnutrition for a nutrition surveillance program; or for periodic nutrition assessment; or to screen a population to select or determine eligibility of children for food supplementation, therapeutic feeding, or other services. Electronic Weighing Scales is proving effective because of features like Measuring actual weight; Storing the weights in periodic records with name, time and date; Plotting these weights on Growth Charts; Analyzing the nature of curves based on their slope; Devising a plan to act according to the curve traced and Easy to use and local language keyboard.
Electronic weighing scales have an important application in the government programs concerning child development and welfare generally administered by Ministry of Women and Child Development (MoWCD). At the central level, out of budgetary allocation to the Ministry, a major amount is spent on Integrated Child Development Services (ICDS) program. ICDS is a welfare programme by Government of India which provides food, pre-school education, and primary healthcare to children under 6 years of age and their mothers. These services are provided from Anganwadi Centres (AWCs) established mainly in rural areas and staffed with frontline workers.
Pros and strengths
Strong sales network: The company’s strength lies in the sales network, comprising of over 84 personnel spread over 13 branch offices across India. Front-ender (Sales Executive) is the link between customer and the company. Proper communication from front-ender through middle management to the top management brings out clear requirements of the customers. The company conducts seminars for its sales people at regular intervals where people from the field interact with each other and share their field experiences. It also updates its sales people with new product developments at these seminars and also seeks their suggestions in improving the products of the company.
In house R&D: The company has well equipped Research & Development (R&D) Department at the corporate office situated at Dhule, Maharashtra. Team of qualified and experienced engineers equipped with modern facilities is engaged in designing and developing electronic hardware and software. At its Tool Room section in the Parwanoo site, designing & development related to mechanical and plastic parts are undertaken. This tool room is equipped with modern facilities like Vertical Machining Centres (VMCs), Electrical Discharge Machining (EDM), Wire-cut, profile projector as well as sophisticated designing software. The R&D team carries out regular research and analysis along-with client studies enabling it to be at par with international players so that there is an ongoing innovation which is reflected in all its products.
Quality Assurance: Inward quality department ensures proper checking and testing of raw materials. Various assemblies and semi-finished products are checked at different stages. Quality inspections are carried out on all finished products. Trained quality inspectors and sophisticated testing instruments ensure quality products.
Risks and concerns
Maximum revenue from few customers: Currently, a significant portion of the company’s revenue is accounted for by sales to the government sector and sales effected through its top 10 dealers. The percentage of sales derived from the company’s top 10 Govt customers and sales effected through top 10 dealers aggregated about 29%, 52% and 56% of the company’s total sales for FYs 2014, 2015 and 2016 respectively. While the company is constantly working to increase its customer base by following new marketing strategies and developing new products and entering newer markets so as to enable it to reduce dependence on limited number of customers, there is no assurance that it will be able to broaden its customer base or sales pattern in a particular time frame in future. The company’s business or results of operations could be adversely affected by a reduction in demand or change in preference for its product or cessation of its relationship with any such major customers / dealers.
High working capital requirement: Over past few years, the company has been successfully executing good number of orders from Govt. Institutions and Govt. sponsored institutions. In view of the general terms of payment by such govt. institutions in respect of supplies to them, there has been a higher requirement of funds for working capital. Presently, the company has sanction from HDFC Bank, for fund-based and non-fund based working capital facilities amounting to Rs 2,250 lakh, which it feels is sufficient to meet its present requirements. However, in future if there are insufficient cash flows to meet its working capital requirement or it is unable to arrange the same from banks/other sources or there are delays in disbursement of arranged funds, or it is unable to procure funds on favourable terms, it may result into its inability to finance its working capital needs on a timely basis which may have an adverse effect on its operations, profitability and growth prospects.
Significantly dependent on management team: The success of the company’s business largely depends on the continued services and efficiency of its management team, particularly the key managerial personnel. As on date, the company has limited human resources to oversee the specific organizational functions assigned to them. Their efficient performance enables the company to carry out the business activities effectively. A limited human resource results in heavy reliability of the company’s business on such key managerial personnel of the company. The loss of its management team or key managerial personnel by way of disassociation or otherwise may materially and adversely impact its business, results of operations and financial condition. The failure or inability of the company to retain and manage its key human resources would adversely affect its ability to implement new projects or execute any expansion plans in future.
Nitiraj Engineers is an ISO 9001:2008 certified company and engaged in the manufacturing and selling of wide range of Electronic Weighing Scales and Systems, Currency Counting Machines and Electronic Fare Meters. The company’s product portfolio range caters to both industrial and domestic consumption. On the concern side, in the last few years, a significant portion of the company’s revenue has been on account of sales to Government sector and sales effected through its top 10 dealers.
On performance front, during the FY 2015-16, the company’s revenue from operations increased to Rs 5,639.45 lakh from Rs 4,351.38 lakh in FY 2014-15 i.e. an increase of around 30% on YoY basis. This was mainly on account of increased income from sale of manufactured goods and contracts completed under the Government orders. The PAT for Financial Year 2015-16 has increased to Rs 550.20 lakh from Rs 418.40 lakh in FY 2014-15, an increase of 31.50% over the previous year. This increase is in line with the increase in the turnover. From the shareholders’ perspective, the company’s Return on Net worth (RONW) ratio has increased to 16.44% in FY16 as compared to 14.91% in FY15 and 16.30% in FY14, indicating that it has utilized the shareholder’s investment well to create returns for them.
Based on the company’s strengths and dedicated management team it is well positioned to take advantage of the immense opportunities available for growth of business. As part of the company’s strategy of continuous new product development it is embarking on a program to extend and expand its product offerings. The proceeds of the present issue will be substantially utilized in development of new products and increase in the marketing network which is expected to bring benefits of enduring nature to the company.