Salzer Update - Kaycee!

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20x in a year

63x in the last 6 years

A major concern?


We posted the Equity research report of Salzer Electronics in August 2024, a market leader in its segment of Industrial Switchgear (Rotary Switches).


It drew our attention again when we saw one of its subsidiaries on upper circuit from May 2024 - Kaycee Industries.


It was incorporated before independence and was the 2nd biggest player in the segment, Salzer purchased ~75% stake in this listed company in 2019-20 at a valuation of ~24 Cr. by paying a premium of ~15% over market price.


Salzer consolidated the market through this deal for synergic benefits and to strengthen its portfolio.


Since then:

Sales ~2x

PAT ~3.5x

Market Capital ~63x


Though the operations are improving, but they are not able to suffice the massive increase in the market capitalisation. There are high chances that the stock may be operated.


Current Market Capitalization of Kaycee is INR 1524 Cr. with Revenue (LTM) of ~50 Cr.

Salzer holds 73.51% currently, amounting to ~1100 Cr.


Salzer itself is at ~1900 Cr. with Revenue (LTM) of ~1200 Cr.


Now a subsidiary is contributing worth ~60% of the total Market Cap while contributing a mere 4% in the Topline.


That brings us to a massive risk that can be related to corporate governance if the stock is operated with the help of promoters.


However, these all conclusions are based on assumptions and we have to keep an eye on the upcoming developments. 

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