Hi Rajeev,
Was away and hopefully resume by next week…
Management concerns and macro concern combination is not healthy for this co. only thing working in favour is its leadership position which should augur well in an upturn whch is still at least 1 year away…
Rgds.
@Mahesh Shah
Hi, are you still tracking LGB Bros? It seems the co is back on track after few bad qtrs.
It has reported an EPS of Rs 51.67 for 9mFY14 against the full FY’13 EPS of Rs. 42.91. I believe it will be able to do an EPS of 64 for FY’14 making the stock valued at ~5 PE.
Also Reliance AMC has bought a 4% stake in the co under its Small Cap Fund on 5-Feb-14.
Thanks
Hi Ilyas,
Yes recent developments are encouraging for this co., but, for me, once corporate governance issue cropped up of not informing shareholders/stock exchanges rgdg. a strike at one of its plants, it was a turn off for me…having said that and having studied this company in detail before, its leadership position in its operating segment is indisputable and once two wheeler industry resumes its growth path, this company could be a major beneficiary.
Rgds.
Discl. - No Holding
lgb looks decent.
but the most important question to ask is…will the indian auto ancillary sector will get re-rated.
most of the auto ancilliary stocks are trading in 3-6 p/e with decent valuations and growth prospects…and at attractive replacement cost/margin of safety valuations …and decent market share/ethical promoters etc…some of the rane group companies come to my mind…there are many such companies…
i believe that a p/e re rating is awaited in this sector…the market caps at which they are trading will invite any businessman to take control of these companies.(replacing these companies and starting something new from a scratch would be difficult at these mkt cap)
Hi VPs,
I am meeting the mgmt. coming Tuesday. So do let me know if any one has any specific query to be addressed.
Bhaumik
Thanks for the offer. My question would primarily be around :
)- Volume growth and OEM presence in the premium segments 150 cc = segments - KTM, duke etc. which should have better realizations. I always knew rolon had a good presence in the 100 cc segment but for margins to improve, this has to be an important lever
)- power situation in TN and impact on costs
)- any OEM’s in the pipeline and volumes expected
There is planned capex this year. Can you ask them regarding the same?
Has the power situation improved and what is the impact of same on capacity utilization and margins?
Mahesh
Plz do take a look at fiem industires. Its also a reputed and growing Auto ancillary. Can these two be compared and a case may be made for better investment.
Regards
Divyansh
Mahesh
Plz do take a look at fiem industires. Its also a reputed and growing Auto ancillary. Can these two be compared and a case may be made for better investment.
Regards
Divyansh
Sorry guys, the call has got postponed…will keep u posted once its done…
Centrum brought out a detailed report on the company, attaching the same.
Giving this thread a bump to see if others tracking this stock have any fresh perspectives.
Q1 results were as expected, a higher single digit growth in sales backed up by 20%+ increase in PAT yoy. At better capacity utilization the ROCE in the transmission components business has tracked the 35-40% range, currently in the 25-30% range. There is some more runway for the operating leverage theme to play out once the effects of GST destocking play out. The business will continue to throw Operating cash in excess of 25 Cr every Q in my opinion, at current valuation the OCF yield is in excess of 8% though the P/E looks optically above average. I expect debt to come down this year as cash generation gets better and utilization improves. Heavy capex over the past 2 FY’s should play out well if the demand scene turns out better than anticipated and comes into the double digit range for a few Q’s.
At a price of 550 and below the risk reward was significantly in favor of investors, at CMP it looks like a fairly valued play that can surprise on the upside at 10%+ sales growth over the next 2-3 years.
Disclosure - Invested since Jan 2015
Hello everyone!
I missed out buying this scrip @ 550 levels. Now it has zoomed on to 1236. The company’s fundamentals seem to be on good grounds. I am expecting it to zoom on to higher levels.
Advice anyone?
Disc: Not invested yet.
Performance of this Co. is directly proportional to auto sales. With increasing auto sales and reducing debt PAT will be significantly higher in coming quarters. The stock has corrected a bit after the split. Perhaps a good time to buy more.
Does anyone has some insights on this company?
Have started researching on this. This thread has not been updated lately.
Hope to have some contribution soon
In drive chains for IC based 2Ws, LG Balakrishnan claims to have ~70% market share in OEMs and 50% in replacement for chains. Its payback (measured by ebitda/gross block) has historically been better than MRF and valuations are reasonable at 4x likely Fy21 ebitda of 220crs (163crs in 9m). Morelikely basis their past trackrecord of a median of 24Rs ebitda on 100Rs gross block, they could do 275crs ebitda in Fy22.
Still, I have been a little worried on LG Balakrishnan’s chains business as electric scoooters donot use chains. eScooters do not use chains as the motor is placed at the centre of rear wheel in most cases. Was positively surprised to see this electric motorcycle having a chain, as denoted by the picture in the article below. https://www.livemint.com/news/business-of-life/an-e-bike-maker-is-out-to-change-someperceptions-11610901487560.html
In another article, I saw that more electric motorcycles are using chains. See the videofor top 15 launches. Infact no 1 is a geared electric bike
Net-net, risk reward seems favourable
Possible that he is interested in investing in other companies (start ups) of his friend.
Please hear last part on why promoter’s son keeps selling.
