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Megha Meharia    


Mumbai, India

Megha is a seasoned financial analyst with a deep passion for the world of stocks and investing. With 3 years of experience in the field, they have honed their expertise in fundamental analysis.

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Contributor since: 2023

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Concord Control Systems Ltd: Riding the Rails of Progress

Concord Control Systems, a vital rail industry player, manufactures coach components and electrification products, thriving within India's expansive railway modernization plans. With strategic milestones, a diverse clientele including Indian Railways, and impressive financial growth, it stands poised to steer India's railway transformation, aligning innovation with infrastructure for a promising future.


About the Company:
In the heart of India's ambitious railway transformation, Concord Control Systems Ltd has carved its niche as a vital player in the manufacturing of coach-related and electrification products. As the Railway Ministry unveils plans for a ₹5.4 trillion overhaul by 2030, Concord Control Systems stands poised to ride the rails of progress. Let's embark on a journey through the company's key metrics, milestones, clientele, and financial highlights.

Key Milestones:
- 2011: Incorporation of the Company
- 2013: Commencement of Factory Unit 1 Lucknow.
- 2017- 2018: Crossed Revenue of ₹1,000 Lac
- 2022: Commencement of Factory Unit II & Listed on BSE LTD SME platform.
- 2023: Acquired a 26% stake in Progata India Pvt. Ltd.

Product Portfolio:
Concord Control Systems manufactures a comprehensive range of railway coach components and electrification products including Inter-Vehicular Coupler, Emergency Lighting System, Brushless DC Carriage Fan, Battery Charger, Tensile Testing Machine, and more.

Manufacturing Facilities:
- Two manufacturing units in Lucknow, Uttar Pradesh.
- Equipped with advanced machinery including CNC Lathe, Radio Test Set, Milivolt Drop Set, and Vacuum Impregnation Plant.
- Prototyping Control and Relay Panels under development.

 Clientele:
- Key clients include Indian Railways zones (Eastern Railway, South Eastern Railway, etc.).
- Various companies such as KEC International Limited, Larsen & Toubro Limited, Kalpataru Power Transmission Ltd, Rail Vikas Nigam Limited, and more.

Industry Overview:

India boasts one of the world's largest and efficient railway systems, managed centrally. Renowned for long-distance travel, bulk commodity transport, and energy efficiency, Indian Railways is a preferred auto carrier. The government prioritizes railway infrastructure investment, encouraging Foreign Direct Investment (FDI) to enhance freight and high-speed trains. Current projects attract both domestic and foreign companies. The Ministry of Railways focuses on expansion, locomotive factories, and station redevelopment to entice private investment. As a national lifeline, Indian Railways continuously innovates in technology, services, and operations, foreseeing a promising future with the unfolding potential of "Concord."
India's railway network is one of the world's largest, managed under a single entity and  Government's focus on investor-friendly policies and ₹5.4 trillion investment by 2030. India is also introducinghigh-speed trains like the Vande Bharat Express and focussing on Network expansion, locomotive factories, wagon induction, and station redevelopment.

 

 Q2FY24 Financial Highlights:
- Revenue from Operations: ₹30.45 Cr (Up 16% YoY).
- Operating Profit: ₹7.87 Cr (Up 173% YoY).
- PAT: ₹6.00 Cr (Up 200% YoY).
- EPS: ₹10.50 (Up 121% YoY).

Finanacial Analysis

Sales in the last 3 years increased from 18 Cr to 49 Cr registering a growth CAGR of 45%.
Similarly, Companys operating profit  also increased from 2 Cr to 8 Cr over the last 3 years and PAT at the same time grew at a CAGR of 71%.

SWOT Analysis

Strengths:
1. Diversified product range
2. Robust quality assurance measures
3. Long-standing customer relationships
4. Experienced and qualified management and employee base

Weaknesses:
1. Exposure to fluctuating metal prices
2. Vulnerability to shortages in electric component supply
3. Dependence on Indian Railways priorities and policies
4. Potential impact from delays in existing or anticipated programs

Opportunities:
1. Vast industrial presence in both public and private sectors
2. High demand for domestic services
3. Access to low-cost, skilled human resources
4. Proactive government focus on reforms and ongoing liberalization

Threats:
1. Decline or reprioritization of Indian Railways
2. Reduction in orders and termination of government policies
3. Adverse changes in government initiatives towards Indian Railways
4. Economic slowdown in India affecting business, financial conditions, and prospects

 

Shareholding Pattern

Promoter own 73%, where as remaining part with public 24% and 2% with DII.

 

Management

Management is very well experience. Govind Lath and Gaurav lath is having experience of more than decade in the industry.

Analysis

The company is came up with an IPO in 2023 only, and showing profitability stronger in the H1FY23 with almost doubling their profit. The prospect of the company is quite stronger with the increasing prospect due to upcoming high-end trains like Vande Bharat etc. The railway infrastructure is started gaining traction all across india and companies like Concord control system are the key beneficiaries of this structural change. Since India is growing the fleet of the Indian railway infrastructure and focussing on indigenous production, that in turn lead companies like concord to benefit. Since company and management is also doing capex taht will in turn help them in exploring new things and expand their product portfolio. 

Conclusion

Concord Control Systems Ltd, with its stellar financial performance, strategic milestones, and alignment with India's railway vision, is not just a player in the rail industry; it's a conductor of progress. Positioned at the intersection of innovation and infrastructure, Concord Control Systems is set to play a pivotal role in shaping the future of India's railways.

 

Disclosure:

I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Business relationship disclosure:

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Stocx Research Club). I have no business relationship with any company whose stock is mentioned in this article.

Disclosure legality:

I am not a SEBI Registered individual/entity and the above research article is only for educational purpose and is never intended as trading/investment advice.

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