Yes, all the 3 segments. They are primarily a differential assembly, several types of gears and starter motor producer. They even have global market share in many of the products. Indeed, they have application in all the 3 segments you have mentioned above.

They are using their existing expertise in starter motor manufacturing to transition into EV traction motors and using the expertise in differential assembly and gears to make same products for EVs.

It’s noteworthy to mention that the differential gears and other gears used in EV shall be exclusively designed, as they need to be extremely strong (as compared to ICE) and should have very good weight to strength ratio.

• Extremely strong – Unlike ICE in EVs torque is very high as the whole power from motor is transferred to the underlying transmission system at once. So, the whole transmission assembly is under immense stress.
• Very good weight to strength ratio – More weight in EV leads to less range

Sona BLW is market leader in this technology of making extremely strong forged components that have very good strength to weight ratio. Also, these components are not generally fungible, that means have to be customized to designed exclusively for an OEM. That leads to the industry best margins for this company. IMHO, they are acting as a contract R&D partner and later contract manufacturer.

The company did not do anything significant during the 2013 – 2020 period ( 1 in the P&L image below). 2019-2020 and 2020 – 2021 was a very hard year for both OEMs and Tier 1s as there was a transition from BS4 to BS6 along with slow export demand and ILFS crisis which created a liquidity crunch in the system.

Post covid however the company sprung back with phenomenal numbers with all the cylinders kicking such as exports, Aftermarket and domestic business in FY 23 and FY 24. FY 22 had the challenge of chip shortage which pulled down the demand from the OEM side and unavailability of containers for export.

Shriram piston is a great precision manufacturing play as over a long cycle the gross margin has been around 55%.

Due to introduction of complex BS 6 engines and further move towards ethanol the demand for the pistons will be there for the OEMs and the replacement market. The replacement market is relevant for CV as they go through 2-3 engine overhaul cycles. Exports are also done to some global OEMs where originally Kolbenschmidt ( JV partner) used to supply.

Technologies absorbed in 2019-20

Technologies absorbed in 2020-21

Technologies absorbed in 2021-22

Technologies absorbed in 2022-23

The next layer of growth will probably come from

1. Export demand to global OEM
2. Aftermarket export demand
3. Domestic PV/ CV/ Tractor demand
4. Domestic aftermarket demand
5. Flex fuel ( upto 85% Ethanol ) pistons`
6. electric motor
7. Precision injection

Disclaimer : Invested.

“This year, we have planned the opening of three new showrooms. One in Ratlam, spanning approximately 12,000 sq. ft., another in Ajmer, around 6,000 sq. ft., and the third in Neemuch, approximately 7,700 sq. ft. We are adding nearly 25,000 sq. ft. of retail space to our existing 41,000 sq. ft., increasing our total showroom area to approximately 66,000 sq. ft.”

The company is increasing its retail space by around 60% and opening three new stores. This is a good sign company is in expansion mode. these stores will have to turn profitable but given the brand name of DP Abhushan in MP getting traction should not be a major issue.

Is there any AGM notes for FY24 released yet ?