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Glass-Lined equipment manufacturer for pharma & chemical sectors 

Standard Glass Lining Technology Ltd (SGLTL) 

is a Hyderabad-based engineering equipment manufacturer for the pharmaceutical (82% of FY24 revenue) and chemical sectors (13%). Established in 2012, SGLTL offers design, engineering, manufacturing, assembly, installation, and commissioning services. Its product portfolio includes reaction systems (57% of FY24 revenue), storage, separation & drying systems (30%), and plant engineering and services (13%). The company operates 8 manufacturing facilities in Telangana and serves 347 clients with over 65 products as of September 30, 2024.It had a ~ 17% market share in India's glass lined equipment market as of FY24.

Key Highlights

* The Indian Glass Lined Equipment Market, valued at ~Rs.11.5 bn in FY24, is projected to grow at a 10.1% CAGR to Rs.18.6 bn by FY29P. Globally, the market is valued at USD 21 bn in CY23, expected to reach USD 34 bn by CY28, driven by pharmaceutical and chemical sector expansion (Source: F&S Report).

* SGLTL’s revenue grew from Rs.240.2cr in FY22 to ?543.7cr in FY24 (CAGR 50.5%), while PAT rose from Rs.25.1cr to Rs.60.0cr (CAGR 55%), aided by its strategic partnerships and inorganic acquisitions.

* SGLTL has an Avg. EBITDA margin of 17.2% and PAT Margin of 10.7%, and the RoE of 28.5%,in FY22-24 period indicating strong financial stability. As of September 30, 2024, the company's net debt-to-equity ratio stood at 0.3x.

* The company has agreements with industry leaders like HHV Pumps for vacuum pumps and with Asahi Glassplant Inc. (AGI Japan) and GL Hakko for glass procurement, strengthening its position in the Glass Lining and Vacuum Pumps market in India.

* SGLTL did Pre-IPO placement of 28.6 lakh shares (Rs.40cr) to Amansa Investments at a price of Rs.140 per share in December 2024.

* The company plans to invest in expanding capacities for existing and new products. It has begun constructing an additional facility in Hyderabad, Telangana to enhance its offerings in glass lining equipment and stainless steel and nickel alloy equipment.

* The company plans to diversify its product offerings to oil and gas, paint and coatings, edible oils, flavors and fragrances, aerospace, and heavy engineering.

At the upper price band of Rs.140, SGLTL is available at a P/E of 38.5x (on FY25 Annualised), which appears fairly priced compared to peers. The growing demand for glass-lined equipment in pharmaceuticals and chemicals offers significant growth potential. SGLTL’s healthy margins, consistent revenue growth robust growth outlook, a diverse product portfolio with a focus on customization, and inorganic growth plans support a "Subscribe" rating for the stock on a medium to long-term basis.

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SEBI Registration Number: INH200000345