Assam Carbon Essentials

Discover and get a complete analysis on Assam Carbon Products Limited - Management, Business Model, Financials, Growth, Valuations, Funding Rounds, News and get the latest updates on Assam Carbon Upcoming IPO.

ISIN

INE496C01018

Face Value

₹10.00

Total Share

27,55,600

Total Income

₹50.42 Cr

Profit After Tax

₹6.30 Cr

EPS

₹22.88

P/E

10.05

P/B

1.99

Market Capitalisation

₹63.38 Cr

Enterprise Value

₹60.24 Cr

Book Value

₹115.53

Intrinsic Value

₹554.00

Earnings Yield

9.95 %

Sector

Materials

Sub-sector

Mining

Category

Listed on Small Exchange

Cashflow - Operations

₹7.35 Cr

Cashflow - Financing

-₹5.09 Cr

Assam Carbon Growth

Compounded Sales Growth

  • 13.61%

    1 Year

  • 6.18%

    5 Year

  • 2.84%

    9 Year

Pro Only

Compounded Profit Growth

  • 53.75%

    1 Year

  • 18.43%

    5 Year

  • -2.56%

    9 Year

Pro Only

Return On Equity

  • 19.80%

    2022

  • 97.68%

    2018

  • 5.31%

    2014

Pro Only

About Assam Carbon

  • Assam Carbon Products Limited manufactures electrical, mechanical, and specialty carbon materials, with a product line that includes a variety of carbon, metal, and graphite blocks and blanks. The Company fabricates industrial products such as Carbon Brushes, Current Collectors for Railways and City Metros, Carbon and Graphite Seals, Bearings, and several other Mechanical and Specialty Carbon Materials for other industrial applications across a wide range of industries, including Steel, Cement, Aluminum, Power Plants, Sugar Mills, Paper Plants, Mining, Chemical Plants, Agricultural Machinery, and so on, from these blocks and blanks
  • The company employs roughly 350 workers in manufacturing units in Guwahati, Assam, and Paten Cheru, Telangana.
  • About 50 years ago, the company started up its first plant. Assam Carbon pioneered indigenous technology to generate world-class metal graphite carbon materials for the first time in India in the late 1970s. Assam Carbon teamed up with the Morgan Group in the United Kingdom, the world leader in carbon technology, in 1972 to produce electro-graphitized and resin-bonded Carbon blocks.
  • The joint venture (between Assam Carbon and Morgan) lasted from 1972 to 2016. On May 25, 2016, Assam Carbon became an independent corporation after the current management purchased all Morgan shares when Morgans opted to depart the Indian carbon business. However, under the terms of the agreement with Morgans, the Company has perpetual rights to create any grades/products for which it has acquired the necessary technical know-how from Morgans.

  • Assam Carbon IPO Details

The firm is listed on the Calcutta Stock Exchange, and as of now, no IPO plans are in place.

  • Assam Carbon Merger & Acquisition

Acquisition

  • On 30 June, 2016 Rakesh Himatsingka , Managing Director of the company, completed the acquisition of 28.78% share in Morgan Advanced Materials for undisclosed amount. 
  • On April 12, 2017 Shaurya Veer Himatsingka, one of the company's promoters, completed the acquisition of a 23.84% share in Prabhat Goenka for INR 1.1 Mn. 
  • On 12 April, 2017 Rakesh Himatsingka , Managing Director of the company and Shaurya Veer Himatsingka a promoter of the company  completed the acquisition of 25.69% share in Assam Carbon Products Limited for 3.54 Mn.
  • Assam Carbon Subsidiaries

Assam Carbon Products UK Limited (ACUK)

  • The company was unable to remit the initial subscription payment towards ACUK equity shares due to the pandemic (Covid-19). Furthermore, since its establishment, ACUK has been unable to begin any operations and has not completed any transactions. By resolution of the Board dated 25.06.20, ACUK decided to treat itself as a dormant company under UK Company Law. The Company has not made any investments (financial commitments).

Assam Carbon Business Model

  • The company's primary business is the manufacturing and trading of various types and grades of Carbon & Graphitized Blocks and Blanks, which are then used to fabricate Electrical Carbon Brushes for the Railways and a variety of industries, including Steel Plants, Sugar Mills, Paper Mills, Motor & Generator manufacturers, Mining, Power Plants, and so on, and from which the company earns money.
  • Assam Carbon Revenue Segmentation

  • Revenue generated from trading of goods
  • Revenue generated from scrap sales
  • Other Income
  • Revenue generated from Manufacturing of Electrical, Mechanical & Specialty Carbon Products
  • Assam Carbon Product & Services

Products Offered:

  • Electrical Products
  • Mechanical Products
  • Specialty Graphite Products
  • Aegis Ring
  • Assam Carbon Assets

Assets as on 31 March 2022:

AssetsAmount in Cr.
Freehold LandRs 0.18
BuildingsRs. 1.26
Plant and machineryRs. 11.37
Office Equipment'sRs. 0.12
VehiclesRs. 0.07
  • Assam Carbon Industry Overview

Industry Statistics

Carbon Industry

  • Carbon markets strive to reduce greenhouse gas emissions by allowing traders to trade emission units (carbon credits), which are certificates that indicate emission reductions. Trading allows entities that can reduce emissions at a lower cost to be compensated by higher-cost emitters for doing so. Carbon market mechanisms promote awareness of the environmental and social consequences of carbon pollution by putting a price on carbon emissions, encouraging investors and consumers to adopt lower-carbon alternatives.
  • The market is divided into Product Types (Carbon Fibers, Special Graphite, Carbon Nanotubes, Graphene, Carbon Foams, and Others), Application Types (Aerospace & Defense, Electronics, Sports, Automotive, Construction, Energy, and Others), and Geography Types (Aerospace & Defense, Electronics, Sports, Automotive, Construction, Energy, and Others) (Asia-Pacific, North America, Europe, South America, and Middle East & Africa)
  • By the year FY20, the worldwide governance of greenhouse gas (GHG) emissions will have undergone a significant transformation. In the forward, the Paris Agreement will serve as the new framework for the worldwide effort to tackle climate change. This is in stark contrast to the Kyoto Protocol, which took a different strategy. The Paris Agreement's new environment has significant ramifications for the voluntary carbon market, i.e. the voluntary purchase and retirement of carbon credits.

Advance Carbon Material:

  • Advanced carbon nanomaterials, which include fullerene, graphene, and carbon nanotubes (CNTs), are regarded as the foundation of engineering and scientific innovation because of their diverse chemical, physical, and electrical capabilities. Different physical and chemical processes, respectively, are used to manufacture sustainable carbon materials. Additionally, manufacturing techniques are employed to produce enhanced carbon monoliths, which are components with desirable qualities.
  • Sports, automobile, power, electronics, aerospace & military, and the built environment. A significant application market for advanced carbon materials is found in aerospace and military. Demand for aerospace & defense innovative carbon compounds is being driven by the ground-breaking design of flexible integrated circuits suitable for high temperature operations in military aircraft flying at high speeds. Furthermore, the design of wing boxes produced from composite materials is a result of the emphasis on producing lightweight aircraft. The need for sophisticated carbon compounds is increasing because to the fabric requirements of those light systems.


There are two main categories of carbon markets:

  • Cap and Trade: Organizations that exceed the mandatory limit (cap) on greenhouse gas emissions can purchase excess allowances to bridge the gap or pay a fine under cap-and-trade.
  • Voluntary Carbon Markets: All transactions of carbon offsets not purchased with the intent to surrender them into an active regulated carbon market, as well as offsets purchased with the intent to resell or retire them to fulfil carbon neutral or other environmental claims, are included in the voluntary carbon marketplace. Companies and individuals who assume responsibility for offsetting their own emissions, as well as entities that acquire offsets before emissions reductions are required by regulation, drive the voluntary market.
  • Demand for voluntary carbon credits has risen quickly in recent years, more than tripling in the last three to four years and expected to reach 95 million tonnes of CO2 equivalent in FY20. Demand for all sorts of loans has increased, but especially for Nature Based Solutions.
  • India is the world's third-largest producer of greenhouse gases and the world's second-most populous country. For the first time in forty years, India's overall emissions in FY19 were 132Mn. tonnes of carbon dioxide equivalent, and emissions are on the down. The country's per capita emissions remain low, at 1.94 tonnes of CO2 per capita, less than half of the global average of 4.2 tonnes of CO2 per capita. Over the last decade, India has developed into an economic powerhouse, with an average GDP growth rate of 6.7%. India's GDP is predicted to shrink by 4.5% to 10% in FY20 as a result of the COVID-19 economic downturn, although it is expected to rebound by FY25.

Growth Drivers:

  • The rise in the need for carbon materials is mostly due to an increase in industrial applications, which is expected to boost market demand throughout the forecast period.

Key Trends:

Special Graphite to Dominate the Market

  • Special graphite is utilized in a variety of applications, including silicon semiconductor manufacture, LED chips, lithium-ion batteries, polysilicon production, continuous casting dies and crucibles, and automotive vacuum pumps, to name a few.
  • Extruded graphite, isotropic graphite, and moulded graphite are the three most commonly used varieties of special graphite. Isotropic graphite is the most generally used variety because to its high temperature and stress resistance.
  • Single-story and lower-quality buildings use Category 1 flame retardant building materials, which contain 5% expandable graphite in their construction. Expandable graphite is increasingly being used in flame retardant building materials (up to category 4) that include 50 percent expandable graphite and are used in multi-story buildings and sky scrapers.

Peers:

  • Peers of the company include Rain Industry, Indian Carbon Limited, Goa carbon Limited, Oriental carbon & chemicals ltd etc.

Future Prospects

Outlook:

  • India's objective of 450 GW of clean energy by FY30 will require about $250Bn. in investment between FY23 and FY30. To reach its 175 GW by FY22 aim, India will require about $80Bn., in investments in renewable energy infrastructure (excluding transmission lines) in the near future.
  • The Indian government is taking a number of steps to modernize its old railway infrastructure and improve service quality. By FY30, the Railway Ministry intends to invest Rs.50 lakh crores (US$700 billion) to improve the railways.100% electrification of railways, expansion of new lines, upgrading railway stations, introducing and eventually developing a large high-speed train network interconnecting major cities in various parts of India, and development of various dedicated freight corridors to reduce cargo costs within the country are all part of the upgrades. This bodes well for the company, as this investment will represent an increase in the Indian Railways' operations, resulting in a considerable boost in demand for the company's products.

Government Initiatives

Government Regulatory Body:
  • Ministry of New and Renewable Energy: The Ministry of New and Renewable Energy (MNRE) is a government of India ministry that is primarily responsible for research and development, intellectual property protection, international cooperation, promotion, and coordination in renewable energy sources such as wind power, small hydro, biogas, and solar power. It is led by current Union Cabinet Minister Raj Kumar Singh.
Paris Agreement:
  • The Paris Agreement is a historic environmental agreement signed in FY16 to combat climate change and its severe consequences. In FY16, India approved the accord as well. The pact intends to significantly cut global greenhouse gas emissions in order to keep global warming to 2 degrees Celsius over pre-industrial levels this century, while also investigating ways to keep it to 1.5 degrees. All major polluting countries have agreed to reduce their climate-altering pollution and to strengthen their commitments over time as part of the accord. The pact establishes a framework for the transparent monitoring, reporting, and racking up of countries' individual and collective climate mitigation and adaptation efforts, as well as a pathway for developed countries to assist developing countries in their climate mitigation and adaptation efforts.

Kyoto protocol and carbon credits:

  • The Kyoto Protocol is an addendum to the UN Framework Convention on Climate Change that aims to reduce greenhouse gas emissions that cause climate change. The Kyoto Protocol was signed on December 11, 1997, at the third meeting of the treaty's parties in Kyoto, and it took effect on February 16, 2005. In August of 2002, India signed and ratified the Kyoto Protocol. The Kyoto Protocol establishes legally binding targets and deadlines for industrialized countries that have accepted it to reduce their GHG emissions. Governments have been divided as developed (those that have agreed to reduce GHG emissions) and developing (those that have not) (who have no GHG emission reduction obligations)

Assam Carbon Strengths

  • Because of the steps taken by management, such as price rationalization, strong control over credit sales, and staying away from loss-making accounts, the company has maintained operational efficiency even after the epidemic.
  • The company has received a rating of "A", from Mira Informa as of June 2021, which primarily means "business dealings permissible with moderate risk of default". The rating represents a smooth functioning of business with a strong return base. 

Assam Carbon Shortcomings

  • Because the industry is rapidly inventing, the company's future may be jeopardized if they do not innovate in their product segment. It is critical for the company to innovate in order to remain competitive.

Assam Carbon Opportunities

  • Nirmala Sitharaman, India's Finance Minister, delivered the Union Budget for 2022-23 in Lok Sabha, announcing that 400 new-generation Vande Bharat trains with increased energy efficiency and passenger riding experience will be planned and built over the next three years. This speaks well for the Company since this investment is expected to boost the demand for the company's products.

Assam Carbon Threats

  • One of the company's threats is the conversion of DC motors to brushless AC motors in locomotives and power plants, as this innovation will have an influence on the industry.
  • Massive and unpredicted increase in the Raw Material price and volatility in the prices of the consumables may significantly impact the profit margin of the Company.
Assam Carbon Rating

  • RECOMMENDATION

    Buy

  • Assam Carbon Detail Info

Industry Statistics

PUBLIC LIMITED

Registered In

India

last Updated

22/02/2022

Registered Date

17/04/1963

Planify Ticker

ASC

Reg Office: Assam Carbon Products Ltd., Birkuchi, Narengi Chandrapur Road, Narengi, Guwahati- 781 026, Assam.

Visit Website