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Talbros Automotive Components Ltd

admin — Sun, 25 Jun 2023 11:25:38 +0000

Brief:

TACL, part of the Talbros group, was incorporated in 1956 and is promoted by Mr. Pran Talwar and his family. The company manufactures gaskets and forgings that are supplied to original equipment manufacturers and the aftermarket. It has four gasket production facilities: two at Faridabad in Haryana and one each at Pune in Maharashtra and Sitarganj in Uttarakhand. It has a materials division at Sohna, in Gurgaon, and a forging plant at Bawal in Rewari, Haryana.
Talbros continues to hold a 40% market share in the Gasket segment.

Mega Trends:

Automotive components/ Supplying to foreign clients BSVI products. Supplying to EVs also.
Joint Ventures – Chassis Business- JV has received multi-year order from a giant European carmaker

Improvement:

The company has improved its export share of revenue from about 15% to 25%. This has resulted in improved EBITA margin from 10-12% (in the Domestic market due to intense due diligence by OEM) to 16% in the export market as the OEMs are concerned about timely delivery and quality of products.(Telecon Nov 21). The company has also undertaken a capex in the forging division primarily focussed on the machining components in-house which till now was being outsourced. This will cause a substantial increase in capacity utilization of forgings from the current Rs 15-16 Crs and expect it to touch Rs 22-23 Crs per month. In the next three years, revenue from the forging division can easily touch Rs 300 Crs per annum. The company has started producing HEAT SHIELD -a futuristic product. It expects it to be a landmark product in times to come which will be adding substantially to both domestic and export revenue.

2023

Uno Minda Ltd

Brief

It is a technology leader in the auto components industry and a leading tier-1
Supplier of proprietary automotive solutions to...

Neogen Chemicals Ltd

Brief

One of the largest manufacturers of bromine derivatives & lithium salts in India
Has a diversified range of 205 products in...

Mayur Uniquoters Ltd

Mayur Uniquoters is primarily engaged in the business of manufacturing of artificial or synthetic leather (PVC Vinyl, PU - new capacity...

Kabra Extrusion Technik Ltd

Company was incorporated in 1982. It is part of the Kolsite group (promoters are Kabra).
Company specializes in providing plastic extrusion...

Gujarat Fluorochemicals Ltd

Gujarat Fluorochemicals Limited (GFL) is an Indian Chemicals Company with over 30 years of expertise in Fluorine Chemistry. GFL holds domain...

ABB India Ltd

admin — Sun, 25 Jun 2023 11:24:29 +0000

Brief:

ABB INDIA (ASEA BROWN BOVERI) is Technological conglomerate engaged in served utility and industry customers for over six decades with the complete range of engineering, products, solutions and services in areas of Automation and Power technology.
Segment Break Up

1.Robotics and Motion – 40.6% Revenue from India – 68%

2.Electrification Products – 37.7% Rest of the World – 32%

3.Industrial Automation – 21.8%

Mega Trends

Capital Goods Capex on the anvil
Infrastructure and Realty Sector having tailwinds
AMRUT / GATISHAKTI / EV n BATTERY /National HYDROGEN Mission

Actions

Broke out in May 2021 from a long consolidating range since 2014 on the back of Government’s announcement of Capex plans. Currently on a volume assisted steady and clean step formation in Weekly TF.

Competitive Advantage

Strong Market Position, Technological Superiority, Strong Cash Position

Improvement

HIGH Growth Expected in Renewables, Water & Wastewater, Warehousing , Logistics
Moderate Growth Expected in Food & Beverage, Pharma ,Data Centre ,Railways & Metro, Power Distribution, Automotive

2023

Elgi Equipments

Elgi Equipments Limited is in the business of manufacturing and supplying Air Compressors
& Automotive Equipments.
92% Revenue from...

Elecon Engineering Company Ltd

Involved in the design and manufacturing of Material Handling Equipment and Industrial Gears and also providing construction and commissioning...

Bajaj Electricals Ltd

Involved in the design and manufacturing of Material Handling Equipment and Industrial Gears and also providing construction and commissioning...

APL Apollo Tubes Ltd

admin — Sun, 25 Jun 2023 11:22:02 +0000

Brief

APL Apollo Tubes (APL) is India’s leading structural steel tube manufacturer with a capacity of 2.6 million tonne per annum (mtpa) and a pan-India presence.
APL’s market share enhanced from 27% in FY16 to 50% in FY21, led by a strong distribution network, branding, offering of customized & innovative products and capacity enhancement.

Mega Trends

Growth in construction to drive demand for structural steel : Structural steel market in India and future growth- India’s overall steel market size stands at ~100 mtpa, of which structural steel tubes account for 4 mtpa (~4%) only. The share of structural steel tubes in the overall steel market in India is much lower compared to the global average, which ranges from 9- 10% of their respective steel markets. This provides significant growth potential for the structural steel segment to expand its market share in Indian steel market by replacing the conventional RCC and wood usage (especially across the construction and the building segments), which are labour intensive, prone to high wastage, and time consuming

Actions

In consolidation phase since Sep’21 at all time high prices/valuations

Competitive Advantage

Much ahead of its peers-
With a 2.6 mtpa capacity and 63% utilisation level, APL is far ahead of its peers with 50% share in the domestic market, which is significantly higher than the second largest player’s (which has 9% market share).
The dominance in the competition is largely led by the continuous introduction of innovative products across segments that are largely acceptable in the market. Furthermore, with its large and strong distribution network and reach towards the end customer, the company is far ahead of its peers. Also, nearly 60% of its product mix comprises value-added products (high margin) and ~40% of its products face no competition at all in the market.

Improvement

With backward integration, APL is not only able to save on the process cost but has also created a barrier for its peers – the company has entered backward integration in structural steel manufacturing process by introducing cold roll milling. Through this technology, it downsizes the standard HRC coil width from 2mm to 1.2mm1.4mm (which is used for manufacturing of high-value products).
Earlier, the company was getting these sized customized HRC from Tata Steel and JSW Steel at a much higher price and these products were also made available to competitors

New

APL has planned a capacity expansion of 1.4mtpa (0.4 mtpa in FY22, 0.6 mtpa in FY23 and 0.4mtpa in FY24). Of this, 1mtpa capacity will be across its Raipur facility while the balance 0.4mtpa capacity will be across other units .Expansion will be towards:
0.2 mtpa for 500×500 diameter steel tubes which will be used in heavy building structures
0.2 mtpa towards 500×500 diameter color coated structural tubes (first of their kind in the Indian market)
0.8 mtpa towards existing product categories.
All these expansions will be in value-added segments, which are expected to garner an EBITDA/tonne of INR6,000.
The company plans to incur Capex of INR3.25bn/INR2.5bn/INR2.0bn in FY22E/FY23E/24E for the same, which would be
met through internal cash flows.
Slowdown in economy or government spending on infrastructure.
Fall in steel prices which could result in inventory losses and, thus, lower EBITDA/tonne for APL.
Slower-than-anticipated recovery and growth in the real estate market.
Slowdown in steel demand, especially across building and construction segment, could impact the structural steel penetration within the steel sector. This would impact the company’s volume growth and, thus, margins.

APL reported strong 12.9%/14.9% CAGRs for volumes/sales over FY16-FY21, led by both capacity expansion (through organic and inorganic route) and improved product demand. Going ahead as well, we expect APL to clock strong volume CAGR of 16.9% and revenue CAGR of 19.8% over FY21-FY24E, led by improved demand from growth across construction activities, large-scale product acceptance by replacement of conventional products, enhanced capacity and utilisation.