RE super meteor 650 retails around 5 lakhs (on road). It sells around 1000 pieces per month. I don’t know how many other brands can convince these many people to spend such a huge sum (a sum at which you can get a decent car out and running on road) for a bike.Triumphs and harleys at around 8-10 lakh range barely sell 100 bikes per month. I strongly believe 650cc will take off in coming decade. In India next set of growth may come from migration of 350cc customers to 650cc or 450cc.Classic 650 which is right now in rumor stage will be a good inflection point for the change.
Also Latin american market and east asian market may be a good growth engine as they can give some respectable numbers.
Dominance in European and north American market helps in building a premiumness to the brand rather than bringing raw sales numbers.

One thing which baffles me why brand is not trying to enter China given it has huge appetite for premium products.

Pennar industries

I am very new in these forum. Posting first time. I have been studying this company from few days and wanted to update things here in these company.

1. They are second largest pre engineered building maker in India. With a big growth opportunity in the same, management is doing a greenfield and brownfield capex. They have a US presence in the same with only 1% market capture, they have large room to grow there too.
2. Their other three core sectors Precision tubes, Engineering services (highest margin), hydraulics, are high margin and growth products.
3. Management is focusing on improving PAT to 4% from current 1.5% by improving product mix by increasing sales of high margin products and introducing new high margin products.

Market cap: 1845 Cr
PE: 20.8
ROCE: 13.3%
Promoter holding: 39.75%
FII holding: 4.69%

8 Manufacturing Plants
1,500+ Engineered Products

Services

• Pre Engineered Buildings (fastest growing business) (core)
• Solar EPC

Products

1. Engineered Components Business (Core)

   1. Engineered Components Business
      1. Automotive Components, Braking and Suspension, Auto Electricals, Chassis & Body, etc.
      2. Hydraulics Cylinders
      3. Precision Sub Assembly Parts. Sheet metal components, assemblies, machined, welded & fabricated components.
      4. White good Components, Product for Rotary and compressor Shell, Tecumseh, Emerson Climate Tech India LTD, Venus Appliances.
      5. Solar Panels, Pennar Industries has set up a 2 Sqft state of the art photovoltaic solar module manufacturing facility, 250 MW Per annum

2. Steel Products & Profiles (capacity: 240,000 MT per annum) (Core)

   a. Cold Rolled Steel Strips (CRSS)

   b. Cold Roll Formed Sections(CRFS)

   1. Electrostatic Precipitators Electrodes (ESP), electrostatic air cleaner is a particulate collection device that removes particles from a flowing gas (such as air) using the force of an induced electrostatic charge.
   2. Purlins
   3. Roofing / Cladding Sheets
   4. Decking Profiles
   5. Metal Crash Barriers
   6. Sheet Piles
   7. Automobile Products, sheet metal products for the Automobile Industry

   

   Clients for Steel products

3. Precision Tubes (Production capacity: 60,000MT/Annum) (ERW – 5000 MT/month, CDW – 1800 MT/Month and Stainless Steel tube – 500 MT/month). (Core)

   1. ERW – 5000 MT/month
   2. CDW – 1800 MT/Month
   3. Air Pre-Heater
   4. Boiler
   5. Corten Steel
   6. Galvanized
   7. Stainless Steel Tubes – 500 MT/month

4. Railways

   1. Railway Wagons
   2. Passenger & Metro Coaches

5. Industrial Boilers & Heaters

   1. Turbosteam
   2. Ultrasteam
   3. Ecosteam
   4. Bi-drum
   5. Waste heat recovery boilers
   6. Thermic fluid heaters

6. Aerospace

   1. Aircraft Engine Fixtures Assembles
   2. Long bed Machined Components
   3. Exotic Material(Hard Metals) & Components

Their clients include

I agree that in some cases PE is high due to temporary phenomenon such as margin contraction or consumer slowdown.
What triggered above post is while I was going through the list of companies in my watchlist that can be considered as good quality business, in most cases valuation seems to be stretched. I don’t mind paying extra premium for quality but even after that I don’t feel confident enough.
For example last year I have taken shelter under PSU due to better MOS and dividend while growing at fair rate, I thought looking into IT as it is underperforming for a while but no companies available at under 20 PE in that case as well.
Again I know PE is not the only parameter but in case such as IT PE and Div yield is usually a good indicator when you can consider adding them in portfolio and what worries me, as I mentioned in the above post, is that people are becoming very confident about paying a 70 PE for businesses like Kalyan Jewellers

It’s very basic question – you need to read some books.
Anyway, It means PE got expanded. In bull market PE gets expanded and in bear it gets contracted. Mean reversion may happen, it means even profit increases and PE contracts – price stuck there or come down.

Based on the historical valuations for the sector, i think what happens in almost all sectors is extrapolation of earnings to future years based on 1-2 years performance. Volume growth of 25-30% for cables and wires for last 2 years has been kind of extrapolated by the street going forward which i dont think is sustainable. The effect is already visible in wires, with Havells Q2 revenues for cables and wires where house wires is a dominant mix has grown at best at low double digit growth and they are seeing slowdown in demand.