Motilal comes with a target of 1100 as they initiate the coverage on this gem
Posts in category Value Pickr
Lumax Industries – Brightening Prospects (24-09-2015)
Lumax Industries offers a wide array of complete Automobile Lighting Systems and Solutions, which includes; Head Lamps and Tail Lamps, Sundry and Auxiliary Lamps and other related products and accessories for Four Wheeler, Two Wheeler, Trucks, Buses, Earth-movers, Tractors and a variety of diverse applications.
Lumax signifies ‘LUMINOSITY MAXIMA’ for automobile users.
Lighting products have become an integral part of vehicle styling & design
Lighting products have become an integral part of vehicle styling & design of lamp is being upgraded continuously to enhance the appeal of the vehicle. Further, OEMs now demand lower wattage & higher luminosity lamps to save energy which has made these products more technologically advanced.
The role of lighting manufacturer has progressed from being merely a component supplier to collaborate with OEMs from the concept stage & work as a team.
The auto lighting products in India now seems to be heading towards integration of advanced features with improved design languages.
Collaboration with Stanley Electric has given it a strong technological footing, apart from enabling it to garner business from the Japanese OEMs
Lumax's technical collaboration with global automotive lighting leader Stanley Electric (which holds 35.77% equity stake in the company), has given it a strong technological footing, apart from enabling it to garner business from the Japanese OEMs. The company has been a preferred supplier for several models of the OEMs.
Lumax, which has collaboration with global lighting major Stanley Electric, is likely to be a beneficiary of this as apart from having its own established design & development team, it can procure latest technology from Stanley Electric, which has cutting-edge technology for automotive lights. Further aggressive adoption of LED by OEMs offer an opportunity to auto lighting suppliers like Lumax to expand its customer base as LED requires completely new expertise in the optical design to maximize the benefit from LED.
Hogs a huge 60% market share
Lumax accounts for over 60% market share in the Indian Automobile Lighting Business, catalyzed by its over two decades strong technical and financial collaboration with Stanley Electric Company Ltd, Japan, a world leader in Vehicle Lighting and illumination products for Automobiles.
Enjoys patronage of all major automobile companies
Its top five clients i.e. Maruti, M&M, Honda Cars, HMSI & Tata Motors account for ~79% of revenues, with Maruti alone accounting for around 35% of revenues.
In the passenger vehicle industry, while it has been supplying for most of the models of Maruti, it also supplies for models like Honda City, Jazz, Amaze, Brio, Zest, Etios, Etios Liva, Scorpio, Bolero, Sumo Victa, Safari, Nano, etc. For CVs & 2- wheelers, Lumax supplies to Tata motors, HMSI, Hero Motocorp, Yamaha, etc. In the luxury car market Lumax has been supplying for some models of Bentley, Audi & JLR.
Going forward too, the company is in agreement to supply for most new model programmes of OEMs for both cars & 2 wheelers. Maruti has contracted Lumax to supply lamps for all the new models till FY17. The company will also be supplying to HMSI, Toyota & Yamaha for the upcoming models. In the next 4-5 years, its PV & 2-Wheeler clients are expected to roll out around 30 models & 12 models respectively.
Yamaha is setting up a facility near Chennai & Lumax will supply for all types of lamps for several models including the facelifted Ray Scooter that will begin production in early 2015. Nissan's recently launched facelifted sedan, Sunny, also has Lumax's headlamps. It is also supplying small lamps to Nissan's Qashqai & Juke models in UK.
Plans Rs 300 crore Capex, to double turnover in 5 yrs
Lumax Industries plans to invest Rs 300 crore and double its turnover to Rs 2,500 crore in the next five years.
Over the time, the company has substantially increased its manufacturing capacity and R&D capabilities. Keeping in view the present order book the proposed investment would be around Rs 300 crore in green-field, brown-field and capacity expansion plans in next 5 years, to be funded through internal accruals.
During the past couple of years, the company has invested about Rs 160 crore in its Bawal and Bangalore facilities.
Financial : On equity of Rs 9.35 crore and face value of Rs 10 per share
Kesar Terminals and Infrastructure Ltd (24-09-2015)
Management is targeting 60% EBITDA from KMLL, which is akin to current
EBITDA margin on KTIL storage business. Despite rupee depreciation and
falling imports, I see KTIL’s business to grow, albeit at a slower rate.
And for FY16, KMLL can add another 15Cr revenues. But real inflection
point will be FY17, where we can see the consolidated revenues in excess
of 100Cr.
- Extracts from MoneyControl Forum
Motherson sumi : Recent opportunity to buy (24-09-2015)
Motherson Sumi can't be clubbed with the likes of great companies for eg Gruh, HDFC, Bosch, Wabco. Nestle, P&G. Its no where near a great company. Its a good company though and featuring in Motilal Oswal does not account for anything otherwise its very easy to buy their MOST fund and do nothing.
Trust me any company whose business model is largely dependent upon a single product (exceptions where there is practically no competition or some kind of technology leadership / patent) or a large single client sometime or the other will face the brunt. The best money is made when you buy at moderate PE with an excellent growth outlook and there is complete perception change. I am pretty much sure people will make huge money by buying Page, Bosch, Eicher at current valuations. There is more downside risk then upside. When you buy a stock all one has to take care of is to know / restrict downside risk. The upside will take care of itself.
Screener.in: The destination for Intelligent Screening & Reporting in India (24-09-2015)
How does the screener shows " The comany is expected to give good quarter"? Is there any formula it uses or some methodology behind the same?
iStreet Networks – Flipkart kind of business (24-09-2015)
Hi Ravi,
Did you get a chance to dig any further into this (despite your workload)? Can you please share any latest information you might have gathered?
This looks like an exciting prospect to me and I am planning to take a small position.
Lycos internet – way to digitalization (24-09-2015)
Lots of positive developments going around in the company:
1. JV with Apollo International; Lycos will hold a 49% stake with Apollo's share at 51%
2. Michael Mauldin, founder and inventor of Lycos has rejoined the company after 17 years. http://www.mediapost.com/publications/article/256827/lycos-inventor-michael-mauldin-returns-as-company.html
3. Venturing into wearable technology and IoT
Chairman & CEO Suresh Reddy is confident of 20-25% revenue and EPS growth in FY16 and also planning a UK/US listing on NASDAQ. https://www.youtube.com/watch?v=tTdWIJ0Nsb0
Stock has taken a lot of beating despite decent results and is available at a P/E of 4!!
Disclosure: Invested
Motherson sumi : Recent opportunity to buy (24-09-2015)
Regarding the valuation part of Motherson sumi I would like to add that it always traded at premium because it has very ROCE ( 35% - 40% ), so obviously one has to pay the premium of such companies ( eg HDFC BANK, GRUH FINANCE,EICHER MOTORS, PAGE INDS ) to name few.
Also motherson sumi has always consistently feature in the Motilal Oswal wealth creation study. ( It has given around >30% CAGR growth ).
Kitex Garments another Page industries? (24-09-2015)
yes you are right that Lamaze International is a non profit organisation, there tie up with kitex garments also states some minimum sales agreement ( quantity or value I need to dig out ).
But Kitex garments stated that they are very much confident of meeting the minimum sales agreement but also re-iterated of double sales with respect to agreement quantity.
Lamaze international being a non profit organisation does not matter to kitex garments ( they will get their volume,profit and also strong foot hole for the further brand licensing ).
Varun 2020 portfolio – 2 strategies (24-09-2015)
Manoj - Difficult to say anything on Care. Its a low volume counter
anyways with high FII holding. Continuous daily low volume selling
suggest someone trying to get out.