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Remi Process Plant and Machinery


Remi Process Plant and Machinery is in the business of supplying engineering goods – primarily Agitators – used in core industries such as petrochemicals, fertilisers, pharmaceuticals etc. for the purpose of mixing materials.  It also generates wind power for sale.


A notable feature of its balance sheet are mutual fund investments of over 2.6 crores and freehold land with a cost of about 1 crore, from which it generates substantial interest and rental income.


The company reported profit from operations of just 11 lacs (PY: 1.4 crores) on revenues of 17 crores (PY: 24 crores) exhibiting a significant decline in operating performance.  The leverage, however, appears conservative with a debt/equity ratio well under 50%.

The decline appears to be a result of the general slowdown in capital equipment spending by the industrial sector, which appears to have hit this company – one of the smallest in its industry – quite hard. 

The company is exposed to the risks of indefinitely delayed capital expenditure, lumpy revenues (with potential inability to handle excess orders in good times and excess capacity in bad times), heavy capital investment in a few projects, increased competition, small size and lack of economies of scale, etc.

Management haven’t bothered to provide an intelligent discussion of the economics of their business in the annual report and raises questions on their commitment to outside shareholders if they can’t bother to sit down to pen a few paragraphs on the business once a year.
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