Honda Siel Power- Make in India!

So we’ve all been reading about how India is swiftly gaining ground on China in terms of additional capacities being shifted here across sectors due to rising wage costs in China and lower technological competence compared to India. There’s a company that I came across and it isn’t really a hidden name.

Honda Siel Power is into the manufacturing of various equipments in the power and agri sector. In the Power sector, it makes portable generators which are exported to the rest of the world . These generators range from 1kvA to 7KvA in power.

In the Agri segement, the company primarily caters to the farm equipment needs of rural India -right from tillers to brush cutters.

now, the interesting story here is that after years of importing stuff from Japan and selling it here(basically a trading firm), Honda Siel has now slowly moved to making these products locally and selling them both domestically and abroad.

After localizing the generator portfolio, the company is now developing tillers, brush cutters and engines locally.

As highlighted in the attached doc as well as the ET Now article, the company has made rapid strides over the years to localize production in order to optimize costs and gain a strong foothold in the domestic agri business specifically

This could be an interesting story as we are getting a proven brand that wants to make in India and penetrate the rural market with innovative products that could increase yields/hectare

The major problem i’ve faced thus far is in trying to gage the scalability of the market of the products that Siel makes-be it the brushcutters or the tillers.

I’ve attached a doc which contains all the main pointers from the 2007 AR to the 2016 AR.

Disc: Not investedARNotes (1).docx (9.1 KB)


You didn’t mention anything regarding the tillers business he is getting into. That I feel is the next phase of growth.
As we know electricity in India is getting better day by day, and in this situation its better to diversify your portfolio which is dominated by generators.

Coming to tillers there is lot of competition like vst tillers etc. Does this company has any moat and monopoly products ?


I wished I had an answer. I have been trying to find the answer to same since last several months.

I think the focus here is on the brushcutters and tiller segments. They’ve made their first tiller in India and are now selling it. Earlier, they used to import tillers from Japan. So i guess even the management is focusing on the tiller and brush-cutter portfolio

brush cutters i think are a monopoly for honda. what i cant figure out is the potential market size…

Honda siel power products

zero debt company
Honda Siel reported average constant growth in Sales and profit … If they introduce any new products it will be very good.



1 Like

absoluetly. gives us even more impetus to dig deeper, though data seems to be an issue here. cant understand whats the addressable market for Honda and the scability of it

1 Like

I can see last 5 years sales growth stand at 7% only. Is there any specific trigger for this company ? Or there has been some value unlocking ?

1 Like

Honda siel power- has been selling gensets, engines, and agri based tillers and cutters. As an agri based play, they are increasing their focus on these tillers and other products. From a largely imported machines, it has now become indigenous make and have started exporting to middle East and other countries. Given the scarcity of farmers and the govt push on increasing productivity, it has got good tail winds. Its a debt free company and their cash conversion cycle also shows much improvement. They don’t seem to have done much capex in the recent past or in the near future. Their AR doesn’t carry much info or projections, so very little can be gauged from public info. But I found that gensets still makes the bulk of revenues and it’s on a downtrend due to power surplus situation in our country. Also most of the sales are going the institutional way which may have lower margins. So though the agri play looks promising becoz of Honda brand and sectoral tailwinds, with not much public info and dependency on gensets doesn’t give enough confidence despite two astute investors buying stake in the company. It will be nice if you guys could put your thoughts

1 Like

I guess we might looks to it’s peers like Cummins for a deep understanding in this sector. Also since HDFC has bought them also some research reports is on the card.

My concern is how the switch to motors powered by electricity will affect companies like Honda, Cummins etc that are good at making petrol and diesel powered motors. Very hard to predict 10-20 years down the line, so the future is not that great for these companies unless they switch to battery powered motors. On the other hand, Honda is an admirable company with great engineering DNA, so maybe they will be just fine.

With rural economy thriving, farm loan waivers, tractor sales showing green shoots, good third monsoon on cards, all point towards improving sales for this counter. My only concern is on limited products portfolio from the company. Any inputs from the community appreciated.

They still have a big chunk of sales coming from Gensets. That too me is the biggest drawback/negative about this business

That’s the reason i never invested here. Almost 60% coming from gensets. And that segment is facing huge headwinds.

1 Like

Wonde what Kenneth A and Reliance fund saw here. Also surprising that the parent have so much of R&D and dominance in Motors world wide, why aren’t they introducing some of the new products to India.

Disc - I am invested from sub 1400 levels betting on small mcap and huge potential for their tillers if Rural economy picks up.

Majority are exported. There is good demand for generators for outdoor activities in export markets. Look at their export numbers. 42%+ of the revenue comes from export.
Invested. No trading in last 6 months.

1 Like

As per Companies Act 2013 the remuneration payable to Managing Director, President & CEO shall not exceed 10% of the net profit of the company.

In case of our company Honda Power annual remuneration paid is as follows:-
Rs.2,40,83,273/- :- Yoshifumi Iida, CEO & MD (Graduate Major-Industrial Relations)
Rs.2,11,13,316/- :- Hiroyoshi Sugimizu, WTD (Graduate General Course)
Rs.1,26,55,957/- :- Vinay Mittal, WTD & CFO (Member of ICAI)
Rs.5,78,52,546/- :- TOTAL REMUNERATION
Net profit for FY 2018-19= Rs.54.15 Crores
10% of Net Profit= Rs.5.415 Crores
Therefore, this is clear cut violation of Companies Act, 2013.

Moreover, amount of Managerial Remuneration and Royalties are continuously increasing inspite of declining profit trends.

MDA portion of Annual Report seems to be a Copy Paste of last year. Nothing is mentioned about the sudden decline in Operating Margin in Q4 FY 2018-19.

Such kind of poor corporate governance is really not expected from promoters like Honda Motor Co. Japan and where PWC is auditor. SHAME.

1 Like

Also 175 cr odd loan to Honda motor India in Q4 too red flag.
Wht the hell Honda car company need loan from them.