Recognize your stock: BigBloc Construction receives permission from Shankar Sharma

Recognize your stock: BigBloc Construction receives permission from Shankar Sharma

BigBloc Construction has a considerable margin advantage over its rivals thanks to rejection rates as low as 1–1.25% at their Wada facility.

Bricks made from AAC (Aerated Autoclave Concrete) and building blocks are produced by BigBloc Construction.

On May 7, shares of BigBloc Construction saw a 3.8 percent increase at Rs 274.50 after the purchase of an equity investment by well-known investor Shankar Sharma in the building block maker. At an average price of Rs 235, Sharma purchased 3.65 lakh shares, or 0.51 percent of Bigbloc Construction. The transaction is worth Rs 8.57 crore in total.

In the last year, BigBloc's shares have more than quadrupled, outpacing the 23 percent increase made by the NSE Nifty 50 in the same time frame.

Additionally, on May 7, the business was supposed to release its Q4 results.

BigBloc, which was founded in Gujarat on June 17, 2015, is a company that produces AAC (Aerated Autoclave Concrete) bricks and construction blocks.  Superior properties of AAC blocks include their strength, lightweight design, thermal insulation, sound absorption, remarkable fire resistance, and simplicity of assembly. They provide a non-toxic building option and are energy- and environmentally-friendly.

The firm sells its AAC blocks under the NXTBLOC brand. Mohit Industries Ltd. handled the AAC blocks business till March 31, 2015. BigBloc Construction became an independent company on March 16, 2016, when Mohit Industries' AAC block segment was demerged.

BigBloc Construction states in its FY23 annual report that it can produce 8.25 lakh cubic meters (cbm) annually, with aspirations to increase to 13.75 lakh cbm annually overall.

Three production facilities for BigBloc Construction are situated in Wada, Maharashtra; Kapadvanj, Gujarat; and Umargam, Gujarat. It has positioned itself advantageously to cater to high-profile customers like as Shapoorji Pallonji, Mahindra, Lodha, HDIL, Regency Nirman, Larsen & Toubro, and other big Maharashtran construction businesses.

When it comes to price, AAC bricks are more affordable than regular bricks. According to a previous study report by Bank of Baroda, BigBloc Construction has established itself as a competitive player in the business with AAC blocks priced at Rs 4,100/cbm as opposed to Rs 4,500-5,000/cbm for red bricks.

Furthermore, the business has minimized the amount of products that are rejected; rejection rates are far lower than those of the industry. At its Wada factory, BigBloc has rejection rates as low as 1-2.25 percent, which gives it a considerable margin advantage over rivals. Bigbloc has a product rejection rate of less than 4 percent, compared to the industry average of 7-8 percent.

Background of the Promoter

BigBloc has grown significantly in recent years under the direction of a group of seasoned experts that includes Narayan Sitaram Saboo, Naresh Sitaram Saboo, Mohit Narayan Saboo, and Manish Saboo.

The chairman and executive director of BigBloc Construction, Narayan Sitaram Saboo, has 34 years of management and operations expertise in the textile industry and 10 years in the AAC block sector.

The company's managing director is Naresh Sitaram Saboo. He offers strategic guidance in the technology and equipment selection for the establishment of manufacturing facilities, enhancement of production processes, and new business endeavors.

BigBloc Construction's director and chief financial officer is Mohit Narayan Saboo. As a chartered accountant, he is in charge of company finance, accounting, and legal as well as secretarial duties.

Manish Saboo, who has over ten years of experience as a commercial manager, is the head of marketing and strategy. As executive director, he is responsible for developing and carrying out the company's marketing and financial strategies.

The net profit of BigBloc Construction increased from Rs 2.92 crore in FY17 to Rs 30.14 crore in FY23. From Rs 68.63 crore in FY17 to Rs 200.11 crore in FY23, it saw an increase in operating income.