Shivalik Bimetal Controls: Riding the Sunrise Sector

Why Important for UPSC?
  • Economy: Link to Make in India, PLI schemes, and sunrise sectors’ GDP contribution.
  • Environment: EVs and smart grids reduce carbon footprint → Connects to COP26 commitments.
  • Infrastructure: Smart meters aid energy efficiency → Key for Sustainable Development Goals (SDG 7).
  • Science & Tech: EBW technology as innovation in advanced manufacturing.

Overview of Shivalik Bimetal Controls (SBCL) & Relevance to Sunrise Sectors

  • SBCL Profile:
    • Shivalik Bimetal Controls (SBCL) operates in niche sectors, manufacturing critical components for emerging industries like Electric Vehicles (EVs), Smart Meters, and Switchgears.
    • The company has shown a 130% return for investors over the last three years, indicating strong growth potential.
  • Sunrise Sectors Linked:EVs, Renewable Energy Infrastructure, Smart Grids, and Digital India (smart meters).
Sunrise Sectors:

The concept of Sunrise Sectors refers to emerging industries that show high growth potential due to technological advancements, policy support, and evolving market demands. These sectors play a crucial role in driving economic growth, innovation, and job creation.

Key Products & Applications

Product Applications Sector Linkage
Shunt Resistors: Essential for measuring electricity flow in automobiles, smart meters, power modules, and battery management systems (BMS). Measure electricity flow in EVs, BMS, smart meters EVs, Smart Grids, IoT
Thermostatic Bimetals: Used in overload protection devices for switchgears, medical devices, electrical appliances, and EVs. Overload protection in switchgears, medical devices Power Infrastructure, Healthcare
Electrical Contacts: Used in smart meters, switchgears, and electrical appliances but have lower profit margins. Switches in appliances, smart meters Consumer Electronics, Urbanization
Growth Drivers:
  • EVs use 8–16x more shunts than ICE vehicles.
  • Smart Meter Push: Govt’s Smart Meter National Programme aims to install 250 million meters by 2027, boosting demand for shunt resistors & electrical contacts.
  • Infrastructure & Power Sector Expansion: Modernization of power grids & increased electrification will sustain demand.
Government Initiatives & Linkages
  • Smart Meter National Programme: Target: 250 million smart meters by 2027 → Boosts demand for shunts & contacts.
  • FAME II Scheme: Promotes EV adoption → Direct demand for BMS and shunts.
  • Atmanirbhar Bharat: SBCL’s indigenous EBW tech aligns with self-reliance in advanced manufacturing.
Financial & Market Position
  • Revenue, EBITDA, and PAT have grown at 21%, 24%, and 28% CAGR respectively over five years.
  • Exports make up 55% of revenue, showing global demand.
  • Despite short-term revenue stagnation due to commodity price fluctuations (Copper & Nickel), long-term growth is expected.

Strategic Advantages & Challenges

  • Strengths:
    • High Switching Costs: 75% products are customized; 3–5-year client approval cycles.
    • Capex Potential: ₹75 crore spent (FY21–23); revenue potential 3x FY24 (₹1,600 Cr).
    • Government Policy Support: Atmanirbhar Bharat and PLI schemes boost domestic manufacturing
  • Challenges:
    • Commodity Price Volatility (copper, nickel).
    • Export Dependency: 55–60% revenue from exports (US slowdown temporary).