Shivalik says core components drove latest growth surge

Shivalik Bimetal Controls Limited said approximately 39% consolidated revenue growth in H1 FY27 was led chiefly by older, higher-value core-component programmes moving from sampling and pilot lots into regular orders, while printed circuit board assembly, or PCBA, work made only a small contribution in the quarter discussed.

What drove Shivalik's H1 FY27 growth?

Shivalik said regular orders for developed core components, rather than newly started assemblies, were the main reason for the increase. Management said it had discussed multiple customer developments over the preceding 7 or 8 quarters, and that many of these programmes had progressed from sampling or pilot lots into regular business. It also said design changes at one or two larger customers had begun to translate into orders. The company described most of those developments as higher value-add products, which lifted both revenue and profitability.

Shivalik reported approximately 39% consolidated revenue growth in H1 FY27, alongside a 48% rise in earnings before interest, tax, depreciation and amortisation, or EBITDA, and a 40% increase in profit after tax. The difference between the 39% revenue increase and 48% EBITDA increase is consistent with management's explanation that the mix was weighted toward higher-value core products. Management did not give a rupee value for revenue from these newly regularised programmes or identify the customers involved.

Management said customer programmes typically require time and investment from both Shivalik and the customer before production begins. Once business starts, it commonly begins in a staggered manner, according to the company, rather than immediately reaching its full run rate. It therefore characterised the new core-component orders as potentially sustainable for longer periods, but it did not issue a formal revenue forecast or commit to a specific quarterly growth rate.

Why did shunt value rise while volume fell?

Shivalik said the apparent drop in shunt output volume reflected a change from selling wider and thicker strip material to supplying more finished resistors. An analyst noted a decline of close to 16% in shunt volume alongside growth of close to 36% in shunt revenue. Management said kilograms shipped can be misleading in this transition because the finished resistor contains more processing and value-add than the raw strip material that customers had previously converted themselves.

The company said the change in mix had improved the bottom-line contribution from shunts, even as physical material dispatched declined. This is a core-component transition rather than the newer busbar assembly or PCBA activity that was the focus of other questions on the call. Management also said supplying the finished component can make replacement during an automotive programme less likely because a board-level component change requires complete validation cycles, whereas changing an input material is easier for a customer.

Commodity prices accounted for some reported revenue growth but were not presented as the principal driver of profitability. Shivalik said material costs are passed through in most cases, so changes in metals such as copper and silver have minimal bottom-line impact. Management estimated that, if commodity values were held constant in a comparison of the quarter or half year with the prior period, pure growth in components shipped would still be about 25% to 26%.

Why were PCBA and busbar assemblies not the main driver?

Shivalik said PCBA, busbar assemblies and cell-contact-system, or CCS, activity had only a small role in the reported quarter. Management said these operations had begun producing in increased quantities only for about 1 or 2 months of the last quarter. It expects the activity to convert into larger volumes in the current and coming quarters, but distinguished that expected ramp-up from the core-product growth already recorded in H1 FY27.

The company nevertheless views assembly as a meaningful extension of its existing resistor business. Management said busbar and PCBA activity needs somewhat higher inventory, while programmes undergo multiple validation cycles and design changes. It called the inventory build-up temporary because development work should turn into regular business, and said it was pursuing 2 or 3 programmes to reduce inventory cycles in phases. No inventory amount or timetable for those reductions was provided.

Shivalik said it intends to report the assembly operation as a fourth product vertical within its core business once it becomes substantial. It will not be a standalone subsidiary, according to management, even though one existing vertical is legally housed in a subsidiary because it was formerly a joint venture. This proposed reporting treatment would separate the forward-integrated assembly activity from the company’s three currently disclosed revenue buckets.

Can Shivalik sustain its recent growth pace?

Shivalik said the opportunity exists to sustain comparable growth, but management made that conditional on development programmes materialising as expected and on execution. It said a new set of customer developments can take longer than anticipated to move into production, creating periodic ups and downs. The company’s immediate basis for confidence was the regularisation of projects discussed during the last 7 or 8 quarters, rather than an assertion that all new programmes will convert on schedule.

Management said it expects at least a few more quarters of value-added growth from the core business now in production. It also said the larger future share of revenue from assembly could carry lower margins as a percentage of sales, although at much greater scale. That statement is management’s view of future mix, not guidance: Shivalik did not disclose the present revenue contribution of assemblies, a start date for full-volume production, or a target share of total revenue.

The company is also assessing additional products based on specialised metals for electronic applications. Management said these could involve specialised joining, thicknesses or dimensions, but did not disclose the products, customers, capital requirement or commercial launch date. It said the work had reached a deeper stage of analysis and that something could happen in this area very soon, while reserving details until a decision is finalised.

Conclusion

Shivalik’s H1 FY27 result was chiefly a mix and programme-conversion story: approximately 39% revenue growth and 48% EBITDA growth coincided with older, higher-value component developments becoming regular orders. The shunt business illustrates the shift, with an analyst citing volume down close to 16% but revenue up close to 36% as Shivalik supplied more finished resistors instead of strip material.

The next point to watch is whether PCBA, busbar and CCS programmes progress from their small contribution after only about 1 or 2 months of increased production into the larger volumes management expects in current and coming quarters. Investors can also watch for details on the 2 or 3 inventory-cycle initiatives and any formal disclosure on the specialised electronic-material products that management said were nearing a decision.