NDR Auto Components Ltd

Hi all, Though not an expert in calculation Valutaion however cam across an Auto ancilliary NDR auto while reading the current auto trends- Basic from Screener
NDR Auto Component operates in the auto components industry and manufactures seat frames and trims for four-wheelers and two-wheeler vehicles and other accessories relating to car seats [
It was incorporated and listed in 2019 as a part of Rohit Relan Group. It was listed post demerger of the automobile seating business from Sharda Motor Industries Ltd…
Key cutomer and risk factor is Maruti due to over dependence, However benefit of doubt is as its small company so lot of opportunity to grow by creating a good proflie.

Revenue Mix
Manufacturing Car Seat Structure - 54% of revenue in FY20
Seats Cover - 46% of revenue in FY20 (https://www.bseindia.com/bseplus/AnnualReport/543214/67747543214_09_12_20.pdf#page=41)

Other Income
Interest Income from Fixed Deposit contribute 7.7% of revenue in FY20

QUICK LOOK

  • The main driver of ROE trend over last 5 years is Asset Turnover
  • Company has made significant capex in last 3 years which might be affecting it’s ROCE and ROE
  • Company has a lot of operating leverage. Increase in sales can result in disproportionate increase in operating income
  • Chances of aggressive revenue recognition - Operating profit of company is not getting converted to cash and recievables rising faster than sales

Capex in Progress…

ROE, ROIC and ROCE are showing strength

all views will be welcome

Disc: invested just a tracking quantity as have to gp thru lated AR -22

4 Likes

Hi Kamal,
Thanks for starting this thread on NDR auto & sharing your valuable thoughts.
I have a small position in this stock at ~ 130cr mcap. I was lucky enough to buy it before the up move started in the auto/ ancillary stocks.

While reading about Motherson sumi demerger & Sharda Motor Industries Ltd, I came to know about this demerged entity. Just sharing few points which made me interested in this.

On an initial screening found promoter holding ~ 74%, low mcap, manageable debt, just 59 lakh outstanding shares, trading at 0.6x Mcap/sales, profit making, dividend paying & the final one was the promoter pedigree / reputation. I hope they will be able to replicate what they did incase of Sharda Motor.

As you righty pointed out, ROE, ROIC and ROCE sounds interesting.

My expectations are big here & will keep evaluating the company performance & average up based on that.
Cheers,
AJ

3 Likes


Other income portion seems to be quite high… any info on that?

Though I have to still read AR as i said earlier, Its other Income part is from Dividends in its share from Bharat seats and othe assocaite Toyo Sharda… All research on hold due to office work for 2 weeks :slight_smile: