Exploring cryogenic equipment manufacturing, the growth of Inox CVA, and the future prospects of Inox in clean energy. Discussing the potential growth prospects for Inox in the cryogenic equipment industry, focusing on increasing demand for liquefied natural gas and the use of hydrogen as a renewable energy source.
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Quick takeaways
Inox CVA has captured a significant share of the international market for cryogenic equipment, with expertise in designing and installing cryolines for important projects like the ITER project in France.
While Inox CVA faces concentration risks and a modest annual growth rate in the cryogenic equipment market, its dominance in the Indian cryogenic market and the increasing demand for cryogenic equipment in clean energy sectors present growth opportunities, especially during its IPO.
Deep dives
Inox CVA: Leading Indian Supplier of Cryogenic Equipment
Inox CVA is the largest Indian supplier of cryogenic equipment, specializing in manufacturing and storing liquefied gases. With decades of experience and limited competition in the industry, Inox CVA has captured a significant share of the international market. The company's expertise has led to important projects like being part of the International Thermoneuclear Experimental Reactor (ITER) project in France, where they design and install cryolines for the project. Inox CVA's revenue comes from three key segments: Industrial Gases Division, LNG Division, and Cryoscientific Division. The demand for cryogenic equipment in the clean energy sector, particularly in the storage and transportation of natural gas and hydrogen, presents growth opportunities for Inox CVA.
Risks and Challenges for Inox CVA
While Inox CVA stands to benefit from the increasing demand for cryogenic equipment, there are risks to consider. Market analysts caution against overestimating the growth rate of the cryogenic equipment market, highlighting a modest annual growth of 3% between 2017-2022. Additionally, Inox CVA faces concentration risks, both in terms of manufacturing and revenue. A significant portion of the revenue comes from a single plant in Gujarat, and the top 10 customers contribute nearly half of the company's revenue. Long-term investors should be mindful of these factors. However, with the buzz around space exploration, medical research, and clean energy, Inox CVA's dominance in the Indian cryogenic market could boost its prospects, especially during its IPO.
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Exploring Cryogenic Equipment Manufacturing and the Growth of Inox CVA
In today’s episode for 16th December 2023, we dive into the business of cryogenic equipment manufacturing.
Note: The IPO closes on the 18th of December.
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