Company buying shares from open market and increasing holding. Not significant buy but very little position.
I believe management is ethical and need to look at upcoming quarters.
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Key factors to be considered in near future:
1)Japanese PV manufacturers in India - How they are positioned to tackle the semiconductor shortage issue and Domestic demand revival (Covid impact/BS6/Scrappage policy/PV price increase) since PPAP 60% sales depends on them.
2)RM price fluctuations with respect to the current commodity rally since their raw material price is directly proportional to crude price
3)How much they acquire the SOB in Hyundai, Tata and other opportunities available.
Promoter buying showing some promising signs on the above factors.
Disclosure: Invested
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If you look at in their recent presentation top 3 customers contributing almost 60-70% of their revenue and management strategically reduced MSIL Contribution to 36%. And as mentioned surely there will be short fall of semi conductor mean time because Capex done by Taiwan based top semiconductor supplier will materialized in next year and delayed due to covid 19.
As per last year conceal they are developing 169 models to cater the PVs and two wheeler segement and materialization of those things not knownâŚ
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Hi, Any reason provided by the company for not doing concalls ?
Crisil rating update report
SMG is Suzuki Motor group essentially produces Swift & Baleno. So I would say PPAP still has Maruti client concentration of 53.8% of the total customer base, tho appreciate mgmt working hard to diversify the base.
(source:
- Suzuki's Gujarat plant in India achieves accumulated automobile production of 1 million units | Automotive World
- https://www.equitybulls.com/admin/news2006/news_det.asp?id=286030 (SMG Plant C starts))
PPAP automotive trades at (CMP 199.2) attractive level currently eg. mcap/sales = 0.77
Also, recently a bulk purchase happened here, donât know who this person is though!
Disclosure: Invested
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Additionally commenced plant will be added advantage to PPAP automotive.
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Marcellus sold off a little over 80,000 shares on 9th Feb in a bulk deal, but they havenât said anything about it publically and have probably not completely exited the stock.
Normally I wouldnât bother with the present correction as it seems like a time correction only, and likely offers a good entry into this business. But with the absense of concalls, and the fact that Marcellus sold so many shares and made no statement, is there any other information that anyone has got on why this fall may have happened, and if there has been any change in the fundamentals?
Disclusore: Have a tracking position and considering adding big in this correction if I get any information on what may have caused the fall, as it seems to offer an excellent risk reward
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Hi Vineet,
I wonder as to how do we see this bulk deal since the stocks are held in the individual Demat accounts of their clients. Marcellus had a Webinar on 25th Feb which had PPAP as a holding. I sense this might be rebalancing exercise whereby they might have increased position in some other stock.
I have this as a significant holding and wonât be too concerned with the volatility considering the very small sub 300 Cr Market Capitalisation.
While the company has diversified its client base, the fortunes are tied in a significant way to Maruti which along with other Auto stocks in general has been declining in price off late, and I too wonât be too concerned agreeing to excellent risk reward that you alluded to as well.
Regards
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Thanks @grovmo
Do you also have an understanding of the competitive landscape in the sealing systems and other lines of business of PPAP? Iâm not able to put my finger on the moat of the business
@grovmo this is the link for Marcellus bulk deal PPAP Automotive Ltd. Bulk and Block deals on NSE and BSE
and is this their full position ?
Hi.
1)I noticed that Marcellus has exited both Music Broadcast as well as PPAP Auto from LCP. Does anyone know what they have bought to replace these?
2)How is it that the selling account is in the name of Marcellus? I think the shares would be held individually in client accounts right?
Please see the list by @grovmo above. The LCO webinar on 25,th Feb had PPAP as a holding. I have watched the webinar too, it is available on YouTube on Marcellusâ page. They also specifically spoke about PPAP.
Since then, there has been no disclosure by Marcellus about them exiting PPAP.
The bulk deal happened on 9th Feb. So it looks like this was a rebalancing trade only, and Marcellus have not exited the entire position.
@Vineetjain111
Hi
1)I think Marcellus would build the full position and only then announce while buying e.g. Fine Organic. Similarly, they will announce exit from PPAP only once all shares are sold
2)Logically speaking, rebalancing for PPAP does not make sense. You will rebalance if the position as % of portfolio becomes very large. That will happen only if the stock runs up too much- and obviously that hasnât happened in PPAP
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FYI Marcellus confirmed exiting PPAP and Music broadcast.
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Any idea why PPAP auto is going up ? Considering last time it had gone up significantly was when Marcellus had disclosed they hold it. And after their exit it again has gone up ?
This is quite bemusing & bewildering to be honest, I read the newsletter and sadly exited just yesterday (along with Music Broadcast on 25th May after their block deal which has also shot up significantly)!
Marcellus sold it at a good price back on 9th Feb. Both @Vineetjain111 and I thought it was just some rebalancing but turns out it was a complete exit probably not disclosed on the 25th Feb webinar.
MARCELLUS INVESTMENT MANAGERS PVT LTD Bulk Sell 09 Feb 2021 259.79 83,814
I was tempted to sell today when it hit 250 but didnât. The technical set up has been bullish for a while. Marcellusâ reasons to sell seem justified on the margin and roce front, but the market has known that all along and thatâs why weâre getting the prices that weâre getting. Still think the auto upcycle is around the corner and that may lead to swift retrating sometime over the next year or so.
Iâm invested from 180 and will likely hold on as long as price action remains favorable.
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Toacs Centre Pte Ltd - a singapore based wholesaler in automotive components has taken 5% stake in the company. Any thoughts on this? Strategic investment and synergies to soon play out?
Not invested.