I just did a primary reading of the company and talked to a few of my friends in auto industry. I have 2 main observations:
- WTD (Pranav Relan) just gives one word answers on concalls without putting any efforts to explain his answers in depth. In companies at this market cap., I have usually seen promoters trying to explain their business to get recognition in capital markets. I might be wrong here, since it just might be his way of communication or maybe if he is trying to protect his business.
- The fungibility issue: The seat frames made for one particular model are not fungible. So revenue is not only dependent on Maruti & Toyota but also the specific model for which they are manufacturing. Apart from a few evergreen models like Wagon-R or Alto every model (which now is doing good) has unpredictability & life cycle and getting a order for new model takes time. This is worrying to me since let’s say new breeza is not a hit, the growth prospect will take a big hit at that instant.
These are just my personal views.
Not Invested
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