Goldstar Power Ltd - SWOT Analysis - NSE SME Company

Incorporated in the year 1999, Goldstar Power Ltd battery manufacturing Company, manufacturing & marketing its products under flagship brand "Star Gold". Goldstar Power Limited is located at Hapa, Jamnagar on Jamnagar-Rajkot Highway, Gujarat with an integrated plant wherein battery scrap and discarded batteries procured from dealers and retailers are converted to finished product. The company caters to all three segments of market viz. exports, domestic/after sales market.

The company manufactures and supplies batteries to Amara Raja Batteries Limited under their brand name of "Amaron". The operations and quality control processes have enabled the to develop strong relationships with them over the years. Sale to ARBL accounted to 47.14% of company's revenue from operations for the financial year 2016-17. The company has OEM (Original Equipment Manufacturer) business model with Amara Raja Batteries Limited, which gives it an added advantage and larger order base compared to other players who work on Job work basis.

Strengths -

- Strong Relationship with Amara Raja Batteries Limited
- Quality of the product
- Integrated Plant
- Experienced Promoters

Weaknesses:

- Significant dependence on Amara Raja Batteries Limited (47.14% revenue in 2016-17)
- High Volume-Low Margin Business
- Volatile raw-material prices (Lead)
- Low capacity utilization of 30%

Opportunity:

- Improve capacity utilization (currently 30%)
- Market dominated by few companies, allowing scope for new players
- Pursue international growth opportunities

Threats:

- Market dominated by leader Amara Raja Batteries Limited and Exide Industries Limited
- New players with big moat

Source:

- RHP of the company
- www.goldstarpower.com

Disclaimer: SME investments are subject to illiquidity risk & information asymmetry risk. This is not a buy / sell advise. Please do your own due diligence before buying / selling this stock.

Source : Equity Bulls

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