Menon Pistons Ltd : Auto ancillary / Engineering company

Requesting for VP seniors and fellow VP’s to look for the value in the stock and help me to find difference between compounder or wealth grower on the aforesaid company for long term horizon of investment .In case there is similar thread please merge with the original as I haven’t found the company in the search. However another company of the Menon Group is Menon bearing is found in the search


The Company was incorporated on 25.08.1977 as a private limited Company in the name of Menon Pistons Private Limited in the state of Maharashtra. Due to the increase in turnover of the Company, the Company became a deemed public company on 15.06.1988 and the name of the Company was changed to on 25th June, 1988 and on 10/11/1994 the Company was converted into a full fledged public company vide Special Resolution passed on 10th November, 1994.

Products: Manufacturing of pistons, gudgeon pins and plungers which cater to the automobile industry and power generation segment. it manufactures piston rings and pins for various automobile and industrial engine applications.

Capacity: MPL has two manufacturing units located at Kolhapur and Sangli in Maharashtra. Pistons manufacturing at Kolhapur with an installed capacity of 30 lakh pistons per annum. During 1985, MPL installed second unit for manufacturing of gudgeon pins, pistons and plungers at Sangli with an installed capacity of 6 lakh pistons per annum, 36 lakhs gudgeon pins per annum and 1.45 lakh plungers per annum.

Distribution: The Company has over the years developed a countrywide market divided into four zones headed by the Regional Managers located in the four metropolitan cities under the supervision of Associate Vice President-Marketing based in New Delhi, MPL has eighteen depots located across India situated at East (6), West (4), North (5) and South (3) to cater to customer requirements . Further, the Company has its representatives in each of the states and a wide Dealer Net Work. Among its dealers are reputed business houses such as T.V. Sundaram Iyengar & Sons, Sundaram Motors, Chandok Auto Industries

Major Customers : Cummins India Limited, Tata Motors Limited (rated ‘CARE AA+’), Maruti Udyog Limited, TAFE Motors & Tractors Limited, Eicher Tractors Limited TELCO Ltd. Bharat Earth Movers Ltd… Escorts Ltd. Sonalika tractors , Preet industries ,Emerson ,Greaves india .Lombardini , TVS, Hero honda
Colaboration Since April 2006, MPL has signed a technical collaboration with Dong Yang Pistons, South Korea for the latest technology for manufacturing of Alfin piston.

Promotors : :The Company, promoted by Mr.Ram Menon and Late Mr.Chandran Menon, was incorporated in 1977

The Company has got ISO 9002 certification and also the SHIP-TO USE Certification from Kirloskar Cummins Ltd. for whom Menon Pistons is the sole supplier. This vouches for the quality capability of Menon Pistons.

Menon Pistons is the only Company among the top leading piston manufacturers in India who has developed indigenously the piston making technology and it has developed its own inherent strengths in the design and manufacture of any kind of pistons. This enables the company to face any kind of problems that may arise in the process of piston making and to tackle it confidently. The reputation the Company enjoys in the market and the list of prestigious customers it caters to is an ample indication of its technological capabilities and quality standards.

The Company has got a pre-eminent position in the heavy duty segment and it has got 100% supply arrangement to such market leaders as Kirloskar Cummins Ltd. and Bharat Earth Movers Ltd. Moreover, it is having an increasing presence in the car piston segment. The market share in the car segment is continuously increasing. Moreover, the car segment is slated to be the fastest growing segment in the near future. The Company has an annual average cumulative growth rate of 22% during the last ten years.

Company’s export market ;MPS export their piston assembly and other engineering goods to erstwhile U.S.S.R., U.K., Germany, Greece, Arabian Gulf, Middle East, Australia, South East Asia and other countries. They had become the pioneer suppliers for Autolada vehicle in erstwhile U.S.S.R. and supplied 4.0 million pistons for LADA Cars in different types and sizes

"Stock CMP: 34 ; P/E : 26 Approx ; Face Value : 1 ; 52 week high/low: ₹ 34.95 / ₹ 18.75"

Products application;
• Heavy Duty Diesel Engines for Power Generation / Off Highway Vehicles / Gas Engines
• Heavy/Medium/Light Commercial Vehicles with Diesel Engines
• Passenger Car (Diesel & Gasoline) Engines
• Bi-wheeler (4 Stroke) / Small Engine Applications
Technical Collaboration : Dong Yang Piston South Korea

Rational of investment :
• India Piston and Piston Rings Market: The Piston and Piston Ring market has been one of the fastest growing auto component sectors attributing its success primarily to the automobile sector and demand for higher powered engines. The increasing development in infrastructure, a growing domestic market for automobiles backed by new model launches, increasing purchasing power and stabilizing the government framework will draw in major investments both domestically and internationally
• Ability of MPL to improve its scale of operations, profitability margin having value addition on products
• Effective management with long length of engineering background
• Promotor Holding : 74%
• Growth indicators Growing cash reserve / reducing debt / Continue dispersing the dividends /Profit growth 3Years: 54.84%.
• Niche Sector have strong R&D and technical setup

Achievements/ recognition:
• The First Company in India to develop Ring Carrier Pistons
• Best Vendor Award from Maruti Udyog Ltd in the year 1994–95
• Ship –to – Use Status by Cummins India Ltd since 1995
• Faster Development Award from Kirloskar Oil Engines Ltd
• ISO/TS: 16949 Certified by TUV-S in 2005
• Outstanding Supplier for Excellent Performance award from Cummins Group in July 2006


  • Fluctuation of raw material cost :vulnerability of operating profitability to volatile raw material prices
  • High P/E ratio
  • working capital intensive nature of operations
  • Cyclic industry demand for the auto components
    Questionable financial ethics:
    • Mr. Sachin Ram Menon & Mrs. Gayatri Menon (Couple Promoter, Chairman & Managing Director of the Company) has given Immovable property has given on rent to the Company ; i am not able to find the reason
    • Vehicles not directly involve in company value addition are being financed from H.D.F. C Bank Ltd. - Vehicle Loans a) Vehicle -I (MH09-EK- 0344) Hyundai-I20 b) Vehicle -II (MH09-EK- 0356) Hyundai-Creta
    • SHORT TERM BORROWINGS: Cash Credit against Secured by hypothecation of Raw Material, Work in process and finished goods and equitable mortgage of Land and Building situated at 182, Shiroli, Kolhapur and at H-1, MIDC, Kupwad, Sangli However the company is on rent from promotor
    Snip from annual report 2016-17

Ref :
Latest care rating :
Company’s top Management and other companies : MENON PISTON RINGS PRIVATE LIMITED - Company, directors and contact details | Zauba Corp

Disc: Having started tracking position with 3% of my portfolio invested in the company may be my views biased , This is not investment proposal do your own research before investing looking forward for the views and arguments to negate my rational of investment and reply to my concerns .


Having worked with Diesel Engine manufacturing for almost two decades one thing I could understand is that Piston, Liners, crankshafts, camshaft, connecting rods are the most critical components and all OEM would like to stick to world leaders.
In Pistons, companies such as Mahale, Federal Mogul Goetze and Karl Schmidt are technologically capable supplier with best in class piston designing and integrated testing capabilities with Engines.
In India no company can be technological near the to these giants.
We have make to print supplier in India such as Shriram Piston and Menon who can deliver Pistons based on customer design the testing facilities with these companies are also limited.
Companies such as Mahale, Federal Mogul Goetze and Karl Schmidt partner with OEM and push their technologies to OEM such as Caterpillar, VW, PACCAR, Scania, Volvo and DAF.
Most of the data in CARE reports may be myopic and may be ignorant about the technicalities associated with the product.
Disc: Not invested.

Missed on the risk part as well, Piston is a warranty prone components with huge exposure for defects such as,

  1. High Oil consumption
  2. High fuel consumption
  3. Piston scuffing and seizure etc…

Thanks for very saying the thread and adding the value by including the missing the critical element

These are some very interesting points.

What is so special about the technology of the world leaders you mentioned? To me (a complete layman) all there is to making a piston is forging with imported machines.

Also, what then do you think is the nature of the business domestic players receive? Menon, Samkrg, Shriram, and India Pistons all do OEM work. Would they just be secondary suppliers? Or supply the lower end of the market?

Just did a comparison of revenue growth over past 10 years. It seems that they are stuck in these levels for a long time.

Menon Pistons:

Tata Motors:

Maruti Suzuki