Dalal Street

Motherson Sumi Systems Ltd is a a joint venture of Sumitomo Wiring Systems of Japan and Motherson group of India, is a leading manufacturer of electrical and plastic parts for automobiles globally. It is a market leader for wiring harness in India with over65% share. In Europe it is one of the top three manufacturers for external rear view mirrors, car bumpers and dashboard etc. Currently India contributes 17% of revenue and bulk of its profit.

Motherson is expected to register a 20% CAGR in sales through FY20. Key drivers we see are: an increase in the value of plastic and electrical parts per car (more…)

With cyclical stocks in India having rallied in anticipation of an election induced acceleration in economic momentum and sentiment in the wake of Opinion Polls projecting most progressive Global Politician Narendra Modi Ji as the Prime Minister of India, we look at blue sky valuations for domestic cylicals. We use EV/Sales as our benchmark for manufacturing companies and P/BV for financials, inherently assuming that the profitability cycle mirrors the revenue cycle.

Industrial / Auto / Cement Stocks – Only 4 companies are trading (more…)

The optimism and hope of a stable Government coupled with macro-economic parameters has led to Foreign Institutional Investors shoring up Indian Equities. The strengthening of Indian rupee and confidence in the new RBI governor’s policies and outlook, receding macro concerns like CAD, lower inflation and fiscal deficit numbers. More importantly, they seem to be looking at the overall GEMS market and India looks far better than any of the other members in the BRICS – China has its own issues, especially the banking system, where no one seems to believe the numbers and most investors perceive stress is very high, Russia and Brazil are not favoured, and more importantly.

If there is any further rally after a favourable election verdict, a (more…)