| Munjal Showa-Riding The Fortunes Of Hero Honda, Bajaj Auto, Escorts and Maruti BSE 520043; FY10 Revenues Rs 1000 cr, EPS Rs 7, CEPS-Rs 12, Div-Rs 2 per share Gurgaon based Munjal Showa's 2 plants based in the Auto Hub of Gurgaon, may turn out to be too small just to serve the requirement of 5 mn pairs per annum of 2 wheeler shock absorbers, that are needed by Hero Honda. And then there are Escorts, Bajaj, and MUL to pile on. And production is simply not large enough to cater to all customers. More plants may be necessitated in Haridwar-the site of Hero Honda's 3rd motorcycle plant. The promoters own a massive stake of nearly 60 per cent in the Equity, Enam Securities owns 8 per cent and another 2 per cent rests with UTI. Colossal Growth Opportunity The fortunes of the automotive components segment are linked to the performance of the auto industry. Over the medium to longer term, low penetration levels, a healthy economic environment and favourable demographics, supported by higher income levels are likely to help Auto companies in sustaining their volume growth. The fortunes of the segment are linked to the performance of auto industry; auto component's growth will remain healthy during this period. India is becoming the global manufacturing hub for small cars and US & European companies are expressing an interest in manufacturing small cars and sourcing their auto component requirements from India. The industry is graduating towards world-class technology by implementing highest quality standards like TQM, TPM and Six-Sigma. India is now a supplier of high value and critical automobile components to global automakers such as Ford, Nissan-Renault, General Motors, Toyota and Volkswagen. The industry's turnover is likely to touch USD $50 billion by 2015-16. The potential compounded annual growth rate (CAGR) of the auto component industry is estimated to be 14% in the period 20010-15. Exports from the auto component industry is estimated to be worth USD 3.3 billion in 2009-10, and expected to reach USD $8.2 billion in 5 years. With investments around US$ 15 billion slated for the sector over the next few years, the prospects for India's auto component industry is bright. Auto component players having scale and access to technology will benefit hugely from the structural changes that are happening in the Indian auto and auto component industry. We highlight a number of companies who are leaders in their respective segment and expected to be major beneficiaries from the positive outlook of the auto sector. Safe Harbor Statement: Some forward looking statements on projections, estimates, expectations & outlook are included to enable a better comprehension of the Company prospects. Actual results may, however, differ materially from those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, impact of competing products and their pricing, product demand and supply constraints. Nothing in this article is, or should be construed as, investment advice. |
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INVESTMENTS IN INDIA
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http://in.groups.yahoo.com/group/investwise/
INVESTMENTS IN INDIA
We are low-risk, long-term investors.
Stocks, mutual funds and the entire investment gamut. Only financing/investment avenues in India will be discussed.
For any assistance, questions or improvement ideas, contact investwise-owner@yahoogroups.co.in
****************************************************************
NEW! ==== Check our LINKS and FILES sections for a world of information. REGULARLY UPDATED.
NEW! ==== Check "Tracklist" in Links and Files sections for Investment Ideas.
****************************************************************
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