Sharda Motor Industries
Thread on few key points from the concall
▪️Industry
PV demand is getting traction; 7 lakh cars backlog - were to be delivered by Dec 31
HCV to grow at double digits
Sharda is confident of outperforming auto-ind growth by a big number for next few yrs
Thread on few key points from the concall
▪️Industry
PV demand is getting traction; 7 lakh cars backlog - were to be delivered by Dec 31
HCV to grow at double digits
Sharda is confident of outperforming auto-ind growth by a big number for next few yrs
▪️PLI Scheme
Have applied for the scheme
Some components are included in the govt notification
Waiting for screening & approvals
Have applied for the scheme
Some components are included in the govt notification
Waiting for screening & approvals
▪️Construction Equipments Market
Currently, not supplying anything
Most of the requirement is important
Volume is so low, its not feasible
Whole mkt will open up in coming 2 yrs
No players as of now
Currently, not supplying anything
Most of the requirement is important
Volume is so low, its not feasible
Whole mkt will open up in coming 2 yrs
No players as of now
▪️Eberspacher JV
Currently running at 40-50% utilization
The improvement in the semi-conductors supply issue is slower in CV space as compared to PV
Currently running at 40-50% utilization
The improvement in the semi-conductors supply issue is slower in CV space as compared to PV
▪️Capacity Utilization
Standalone business is currently running at ~85% capacity utilization
Standalone business is currently running at ~85% capacity utilization
▪️Strategy
Going forward focus will be on powertrain agnostic products
Electrification not a threat - marginal impact - as general market is going to grow big
Going forward focus will be on powertrain agnostic products
Electrification not a threat - marginal impact - as general market is going to grow big
▪️Most interesting point
By FY25, >80% of their turnover is expected from CV segment which is hardly anything as of now 🙄
(Did I hear that right? 🤔)
By FY25, >80% of their turnover is expected from CV segment which is hardly anything as of now 🙄
(Did I hear that right? 🤔)
▪️Exports
A key part of their growth strategy
Focus will be on
Small engine customers
Off Highway Segment
Sub-components
There is a big global market for the same and there is no formal leader as such
Sharda has the technology & capability
A key part of their growth strategy
Focus will be on
Small engine customers
Off Highway Segment
Sub-components
There is a big global market for the same and there is no formal leader as such
Sharda has the technology & capability
▪️Electrification
Will play EV theme via Kinetic JV - 2W & 3W
No competition from Amara Raja, Exide, etc as they are power cell manufacturers and Sharda-Kinetic JV will be more into assembling. Former is an asset heavy while latter is asset-light model
Q3FY23; on track
Will play EV theme via Kinetic JV - 2W & 3W
No competition from Amara Raja, Exide, etc as they are power cell manufacturers and Sharda-Kinetic JV will be more into assembling. Former is an asset heavy while latter is asset-light model
Q3FY23; on track
▪️Cash
Company continues to remain debt-free and holds ₹346 cr of cash
Exploring various M&A activities
Have also revised dividend policy
Planned capex is not much - ₹20-30 cr for now
Company continues to remain debt-free and holds ₹346 cr of cash
Exploring various M&A activities
Have also revised dividend policy
Planned capex is not much - ₹20-30 cr for now
▪️Valuations
Enterprise Value ~1950 cr
Market cap ~2300 cr
FY22 Sales ~2200 cr (Ann)
FY22 EBITDA ~225 cr (Ann)
FY22 PAT ~ 150 cr (Ann)
Negative Working Capital Cycle
Return Ratios ~20%+
Prom Holding 73%
Enterprise Value ~1950 cr
Market cap ~2300 cr
FY22 Sales ~2200 cr (Ann)
FY22 EBITDA ~225 cr (Ann)
FY22 PAT ~ 150 cr (Ann)
Negative Working Capital Cycle
Return Ratios ~20%+
Prom Holding 73%
Good candidate for Mutual Funds buying too??
(Disc: this is not a reco; have been holding in core portfolio since much lower levels - no intent to book/add anytime soon)
(Disc: this is not a reco; have been holding in core portfolio since much lower levels - no intent to book/add anytime soon)
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