Sahil's portfolio - looking for feedback

I’ve been part of this forum for a while and have learned a lot from the discussions and shared insights here.

Wanted to share my current portfolio along with my notes, mainly as a way of giving back and inviting discussion.

Happy to hear different views or pushback.

Invested

1. Waaree Energies Ltd

  • PAT scaled from ~₹80cr in FY22 to ~₹1900cr by 2025; execution track record over >10 years
  • India’s largest solar PV player; scale + first-mover advantage across modules and cells
  • Net cash balance ~₹7,000cr+; lean working capital, no leverage during scale-up phase
  • “Winner takes most” industry structure: scale + integration likely to force consolidation; Waaree among clear long-term winners
  • Optionality from new verticals (BESS, inverters, transformers, electrolyzers); incremental ₹1,500cr+ EBITDA potential
  • FY26e EBITDA guidance ₹5,500–6,000cr; core solar EBITDA potential ₹8,000–9,000cr by FY27
  • Policy tailwinds (ALMM and potential extension of similar frameworks to cells/wafer) structurally favour integrated domestic manufacturers and could accelerate consolidation.
  • Massive capacity ramp-up underway: modules ~27GW, cells ~15GW, wafer-ingot ~10GW by FY27
  • Order book ~₹4.4–4.7 lakh cr (~20–24GW) gives earnings visibility till FY28; 60%+ overseas mix
  • Backward integration via Oman polysilicon investment reduces China risk, improves traceability for US/EU, secures supply
  • EBITDA/PAT CAGR ~40%+ over FY25–28 driven by volume growth, margin stability (22–24%), operating leverage

holding this from pre-ipo

2. Axiscades Technologies Ltd

  • aims to reach $1 bn in revenue over the next five years.
  • strong order pipeline in aerospace and defence sectors.
  • Shifting from pure ER&D services to product + IP-led defence and aerospace business, which should improve margins and scalability over time
  • New management team is very strong, with deep global aerospace and ER&D experience (ex-Airbus, Capgemini, Quest Global)
  • Deep engagement with DRDO, HAL, BEL and involvement in marquee programs like LCA Tejas, Project Kusha and SU-30
  • Big beneficiary of Atmanirbhar Bharat, defence indigenisation and offset opportunities.
  • The company aims to scale the ESAI vertical to $30 mn.
  • Involved in counter-drone systems and has supplied 100 units to the Ministry of Defence.
  • Its MRO (Maintenance, Repair, and Overhaul) capabilities, including setting up new facilities near Bangalore airport. They aim to make MRO a 1000Mn business in the next two years.
  • Positioned as a key offset partner for European OEMs like MBDA and Thales, driving high-margin (24–25%) defence work
  • Contract mix is improving with more fixed-price projects and offshore delivery, which should steadily lift margins and reduce earnings volatility.
  • ESAI emerging as third pillar; deepening work with semiconductor OEMs and hyperscalers, validation + testing turning into IP-led monetisation over time
  • Defence is the growth engine: wins in radars, EW, missiles, counter-drone; multi-year MoD visibility, electronics + integration orders active
  • Aerospace provides stable annuity base via OEM engineering and tooling; steady, margin-accretive revenues
  • Large infra build underway; FY26–27 growth not capex-dependent, FY28+ scale, margin and ROCE kicker as facilities ramp
  • Balance sheet cleaned up after QIP and debt reduction, giving headroom to invest in defence infrastructure and long-term growth
  • Strong order pipeline across all three verticals supports aggressive roadmap; management guiding ~65–70% CAGR to FY30 with visibility till FY28
  • Defence production revenues expected to ramp meaningfully from FY26 as programs move from development to production
  • Guided 50–55% EBITDA growth with ~300 bps margin improvement, driven by operating leverage and mix shift
  • Key triggers: defence production scale-up, ESAI monetisation, higher product mix, operating leverage from new facilities

3. Aurion pro

  • Turnaround story led by Ashish Rai (ex-FIS), successfully pivoted from services to high-margin IP product company; recurring revenue is sticky.
  • ₹15,000+ cr order book, ~80% executable in 5–6 quarters → clear revenue visibility
  • Mumbai Metro + data center wins give multi-year revenue visibility
  • Data Center & AI (Arya AI) segments acting as new hyper-growth engines
  • High receivables history & key man risk (CEO Ashish Rai is central to the turnaround story)
  • Revenue CAGR ~25% over FY26–28 with steady ~20% EBITDA margins

4. Ather Energy

  • Technocrat promoters (IIT-M alumni) with strong engineering DNA and product-first culture
  • Quality leader in consolidating EV 2W space (solid No. 3 player gaining share from incumbent Ola)
  • ‘Rizta’ helping them tap mass market + ‘EL platform’ to drive operating leverage on 4.2L capacity
  • Strong moat via proprietary tech (AtherStack) & charging infra (Ather Grid) creating high customer stickiness
  • New Sambhajinagar plant more vertically integrated, lowers BOM and service cost
  • Cost structure improves via LFP batteries, simpler EL architecture, higher localization
  • Path to EBITDA breakeven visible by FY28-29

5. Yatharth Hospital

  • Promoter-led regional hospital chain with strong execution track record in Delhi NCR
  • acquire underperforming assets → add specialties, doctors, robotics → ramp occupancy + ARPOB
  • Highest bed expansion among peers: ~55% capacity addition by FY27 (>3000 beds)
  • Earnings CAGR ~30%+ over FY25–27 driven by beds + ARPOB + operating leverage
  • Deliberate shift toward Oncology and Organ Transplants to boost ARPOB and reduce government scheme reliance from 40% to 25%.
  • ARPOB ~₹30–32k with visible runway vs large peers; mgmt guides 8–10% steady growth
  • Valuations still below large hospital chains despite similar growth trajectory

6. Time Technoplast

  • Global leader in industrial packaging. #1 in large plastic drums, #3 globally in IBCs, #2 worldwide in Type-IV composite LPG/CNG cylinders. Sticky Fortune-500 client base
  • Clear pivot from commodity plastics to Value-Added Products. VAP now ~27–30% of revenue, targets ~35% in 2–3 years, structurally higher margins at 18%+
  • Strong growth visibility: FY25–28E revenue CAGR ~15%, PAT CAGR ~23% driven by VAP scale-up, overseas growth, operating leverage
  • Composite CNG cascade capacity doubling to ~1,080 units by 4QFY26. Revenue potential ~₹8,000 cr pipeline over time
  • overseas at ~34–35% of revenue with local sourcing and manufacturing; margins similar to India at 13–14%
  • Post-2022 leadership change (Bharat Vageria) has delivered on promises: reducing debt, improving working capital, and focusing on ROCE (targeting 20%+).
  • QIP of ₹8–10 bn funds growth capex + debt reduction. Target net-debt-free by FY27. Interest cost savings kick in from FY27

7. Samhi Hotels

  • Owns ~4,800+ keys across 30+ hotels, ~85–90% exposure to Tier-1 commercial cities where demand stays structural and supply remains tight
  • Buys stressed / dislocated hotels below replacement cost, renovates + rebrands under Marriott / Hyatt / IHG, drives sharp uplift in ARR, occupancy, RevPAR
  • Trades ~8–12x EV/EBITDA (FY26–28E) vs peers despite faster PAT growth
  • GIC investment + asset sales driving net debt/EBITDA below 3x, targeted ~1–2x by FY28; falling interest costs amplify equity upside
  • Upscale & above portfolio to rise from ~22% to ~40%+ of keys, higher ARR and stronger F&B contribution, EBITDA margin trending toward ~40%+
  • High flow-through of revenue to EBITDA (~40% incremental margins) due to the asset-heavy model.
  • Market pricing Samhi at a discount due to perception of high debt and lack of leisure portfolio.
  • ~85% portfolio in top 6 cities (Bengaluru, Pune, Hyderabad, NCR, Chennai, Ahmedabad); ~90% revenue from Tier-1 markets with structurally higher occupancy and ARR
  • ~1,500 keys under development / rebranding; Navi Mumbai 700-key dual-branded hotel a multi-year EBITDA driver; portfolio to cross ~6,300 keys in 5–6 years
  • Revenue CAGR ~13–14%, EBITDA CAGR ~17–19%, PAT CAGR ~50%+ over FY25–28 as occupancy, ARR, and leverage improve together
  • Active pipeline adding ~600-700 keys via renovations and new developments (e.g., Navi Mumbai, Kolkata).

8. Sai life science

  • India CRDMO emerging as 3rd global pole; China+1, Biosecure Act, tariff risks driving outsourcing to India
  • Sai best positioned among peers: integrated CRDMO model + strong CRO base + global R&D footprint
  • 7+ potential blockbuster molecules in commercial portfolio; rising revenue per molecule over time
  • Broad capabilities across complex small molecules, peptides, HPAPIs, oligos. Few Indian peers at this depth
  • CDMO revenues expected to grow ~20%+ over next 3 years, led by commercial portfolio
  • Ready capacity + global R&D presence allows faster scale-up when molecules succeed
  • Client concentration low, revenue per client still under-monetised. Long runway for wallet share expansion
  • Margins expected to expand from ~24% to ~28% by FY28 despite conservative assumptions
  • Sector tailwinds strong: Indian CRDMO industry entering multi-year growth cycle (~17% revenue CAGR FY25–28)
  • 160 CDMO projects in pipeline; unique distinction of taking 5 drugs from discovery to commercial (highest among peers).
  • Sole supplier for AbbVie’s Atogepant/Ubrogepant (Migraine); crazy scale-up from $4.2m to $15.8m with ~50-60% value capture.
  • Global footprint with R&D presence in innovation hubs; sticky innovator relationships reduce client concentration risk
  • Margins hitting 29% as mix shifts to commercial
  • Already 7% of revenue coming from high-value Peptides, ADCs & Oligonucleotides (low-risk discovery phase entry).

9. NSE

  • Dominant stock exchange in India with over:
    • 90% share in equity cash trading.
    • 80% share in equity derivatives trading.
  • $50B estimated market cap; trailing P/E ~30-35x.
  • Operating margins >60%, virtually no debt.
  • High operating leverage and digital infrastructure enable strong profitability.
  • Comparable to a toll bridge: low incremental costs, scalable revenue.
  • Dividend yield of ~5% based on current secondary market price.
  • Runs at ~8% of its tech capacity, indicating significant future scale potential.
  • India’s capital markets are booming:
    • Retail brokerage accounts grew from 25M (2015) to 175M+ (2025).
    • GDP has surpassed the UK’s, now the **5th largest globally.
  • Growth drivers:
    • Increasing penetration: active population only 2.9% of the total population.
    • Developed economies are above 10% in equity markets
  • NSE is central to primary and secondary capital market formation:
    • 268 IPOs in 2024 raised $19.5B (vs. NASDAQ’s $22.5B).
  • India is projected to be the fastest growing economy and fastest gap per capita growth
  • Healthy market cap to gdp ratio with India at 123% vs USA at 175%
  • BSE (Bombay Stock Exchange)** is the only competitor, far smaller and less efficient.
  • BSE trades at ~68x earnings, despite weaker fundamentals.
  • From 2014, NSE has continuously taken over market share from use
    • Winners takes it all in the few years possibility
  • Business Model Strength
    • NSE is an infrastructure-layer business with:
      • Minimal working capital needs.
      • Low maintenance capex.
      • Strong pricing power and essential utility status.

bought from the private market

Mutual Funds I’ve invested in

  • UTI Nifty 50
  • Motilal Multi cap
  • Motilal Gold and Silver FOF

Stocks I’m tracking

1. Shaily Engineering plastic

  • Only Indian company manufacturing complex drug-delivery devices for global pharma; healthcare now the growth driver vs legacy consumer/industrial plastics
  • Eight patented injector platforms focused on GLP-1 blockbusters; working with multiple generic and innovator pharma players. End-market opportunity ~$100bn+ by FY30
  • Healthcare revenue mix rises from ~19% to ~35–40%+, with IP-led pens moving from 30% to ~80% of healthcare sales. EBITDA margins already expanded to ~30%+ in recent quarters
  • Pen capacity ~40mn units, doubling to ~80mn by FY26–27; current utilisation ~45–50%. Volume ramp drives operating leverage without proportional capex
  • FY24–28E revenue CAGR ~23%, EBITDA CAGR ~33%, PAT CAGR ~40%+. ROCE expands from ~12% to ~25%+ as healthcare scales
  • Long-standing relationships with IKEA, HUL, P&G, GE, Honeywell ensure steady cash flows while healthcare scales; China+1 benefits visible in non-healthcare verticals

indirectly hold via motilal multi cap; it’s their top holding (~20%)

2. Brigade Enterprises

  • Operates in India’s strongest market; #2 player in Bengaluru, expanding fast in Chennai and Hyderabad. As the housing cycle enters a mid-cycle phase, market share is shifting to large, well-capitalised players like Brigade
  • Presales CAGR ~30% over FY21–25; guided ~14–19% CAGR over FY25–28 on a high base. ~11–15 msf launch pipeline supports growth even as industry volumes remain range-bound
  • Low inventory (13–15 months), price growth ~12% YoY, steady demand from GCCs and tech employment.
  • Collections expected to grow ~32% CAGR over FY25–28 to ~₹123bn, translating into cumulative operating cash flows of ~₹150bn. This underwrites growth without balance-sheet stress
  • ~3.3 msf leased office portfolio with ~92% occupancy. Rental income CAGR ~7% over FY25–28; annuity assets cushion residential cyclicality and improve ROCE quality
  • Hospitality portfolio to scale to ~3,300 keys by FY30. Hospitality turns EBITDA positive and adds long-term optionality once utilisation normalises
  • Net debt/equity down to ~0.2x post QIP; expected net cash of ~₹14bn by FY28 provides flexibility for land buys and annuity capex
  • Trades ~11–16x FY28E EPS and ~6–7x FY28E EV/EBITDA. Multiple expands as collections, rentals and balance-sheet strength become more visible

3. Neuland

  • Transition from commodity APIs to high-margin Contract Manufacturing Solutions; CMS share rises to ~64% of revenue by FY28
  • Unit III capacity expanded to ~536 KL; utilisation still <40%. Headroom supports 3–4 years of growth without major capex
  • Bempedoic acid capacity scaled from 50T to 150T; peak revenue potential ~$75mn. Xanomeline is an exclusive-supply molecule with demand lift from innovator launch traction
  • EBITDA margin expands from ~22% to ~32%+ as CMS mix improves; Q2FY26 EBITDA margin hit ~30%+, well ahead of history
  • FY25–28E revenue CAGR ~21%, EBITDA CAGR ~37%, PAT CAGR ~45%. Asset turnover improves to ~2.5–3x as Unit III ramps
  • ₹2.5bn peptide facility under construction; moves Neuland up the complexity curve with clinical-to-commercial peptide CDMO capability
  • Major beneficiary of the US Biosecure Act (restricting Chinese CDMOs), driving innovator interest in Neuland as a compliant partner.
  • 15+ years of peptide experience with a new 6.37KL peptide facility coming online (FY27) to capture the GLP-1 (weight loss/diabetes) boom
  • Trading ~39x FY27E EPS, reasonable for a high-growth CDMO with multi-year revenue visibility, margin expansion and global demand tailwinds

4. Narayana Hrudyalaya

  • Led by Dr. Devi Shetty, strong execution track record in delivering high-quality tertiary care at affordable price points, without sacrificing margins
  • ~5,500+ operational beds today with only ~50–60% occupancy. Planned addition of ~1,900 beds by FY28 and ~1.3x capacity by FY30 offers strong topline upside without aggressive pricing
  • The Cayman Islands facility is a strategic asset generating ~40-50% of EBITDA in tax-free USD. This funds India expansion without equity dilution.
  • Cardiac, oncology, renal, neuro and ortho contribute ~65–70% of revenue. Complex procedures drive stable ARPOB growth (13–14% YoY) even in soft occupancy quarters
  • Launch of “Aditi” insurance creates a self-reinforcing ecosystem (HMO model), cutting middleman costs and ensuring hospital capacity utilization.
  • FY22–25 revenue / EBITDA / PAT CAGR of ~14% / 25% / 32%. Consolidated EBITDA expected to grow ~20%+ driven by Cayman + India scale-up
  • ₹30bn capex over 3–4 years funded largely via ~₹10bn annual operating cash flows + manageable debt. Net D/E ~0.5x leaves balance sheet flexible
  • NH One Health clinics (~50k subscribers) act as feeders to hospitals. Insurance products (Aditi, Arya) target the “missing middle” with disruptive pricing. Near-term losses, but strong long-term stickiness optionality
  • Receivable days ~30 vs industry ~60 due to high cash-pay mix (~45%). ROE ~22% and ROCE ~16% with scope to expand as new beds mature
  • Industry-leading ROCE (~25-30%) achieved by avoiding expensive real estate and prioritizing asset turnover.
  • Trading at a discount (EV/EBITDA ~19-20x) relative to peers (35-50x), offering a margin of safety.

5. Acutaas chemicals

  • Nubeqa is the game changer: Massive multi-year CDMO contract with Fermion for Nubeqa (prostate cancer drug) ramps up now; expected to drive CDMO revenue from ₹80cr to ₹1,000cr by FY28.
  • First non-Chinese global supplier for critical electrolyte additives (VC/FEC) used in Li-ion batteries; 2,000 MTPA capacity coming online H2FY26 with firm orders already in place
  • EBITDA margins expanded to 31% in Q2FY26 as high-margin CDMO business scales; management guides for 25% revenue growth in FY26 with improving margins
  • Global leadership (50-90% share) in key chronic therapy APIs (Trazodone, Apixaban) provides a stable cash cow to fund high-growth capex
  • Smart JV in South Korea (75% stake) to bypass initial hiccups and directly tap into high-value semiconductor chemicals market by late 2026

6. Supriya life science

  • 12-15 products are backward integrated to KSM (Key Starting Material) stage, protecting margins (consistently 28-30%+) and reducing raw material volatility.
  • Successfully pivoting from China-dependency to regulated markets (Europe/LATAM/North America now ~50%+ of revenue); recently cleared Brazil ANVISA and USFDA audits.
  • Capacity doubling (to ~1020 KL) via new Lote Parshuram block and Ambernath facility; aiming for ₹1000cr revenue by FY27 (conservative guidance).
  • 10-year exclusive contract with DSM Firmenich (Vitamins) and entry into high-value Contrast Media and Anti-anxiety segments providing future upside.
  • Fully funded CAPEX (~₹350cr planned) via internal accruals with a debt-free balance sheet, ensuring high ROCE/ROE remains intact.

7. CCL products

  • Global leader in instant coffee processing with ~7–8% share of global export market share
  • First mover in India in freeze-dried coffee, now expanding premium capacity where margins are higher
  • Pure B2B “coffee foundry” model with cost-plus contracts
  • Operates in the hardest part of the value chain (bean-to-soluble); scale + process know-how not replicable with capex alone
  • Cost-plus B2B contracts pass through coffee price volatility; margins structurally stable despite commodity swings
  • Domestic branded business (Continental Coffee) crosses ₹200+ cr, growing 40–50% YoY; optionality kicker with higher margin potential
  • Dual capability across spray-dried (scale) and freeze-dried (premium); aggressive freeze-dried expansion lifts mix and EBITDA/kg
  • India + Vietnam manufacturing footprint → scale, redundancy, tax efficiency, proximity to raw material
  • Deep moat from 30+ years of process know-how, 900+ custom blends, and customer stickiness across 100+ countries
  • Capacity expanded ~80% over last cycle; utilisation ramp ahead drives operating leverage and ROCE expansion
  • Massive capacity expansion completed (70k+ TPA), operating leverage kicks in FY26–27
  • Clean governance: no promoter pledging, no equity dilution through capex cycle, disciplined capital allocation
  • Classic supply-side dominance play: few global competitors, sticky customers, stable EBITDA/kg across cycles

8. 3B Blackbio

  • First Indian company to get USFDA EUA for RT-PCR; proves R&D is world-class.
  • Scaled production 20x during the pandemic; R&D team is stable and highly qualified.
  • ~85–87% of revenue from molecular diagnostics (RT-PCR / MDx), a structurally growing segment with high entry barriers and strong pricing power
  • EBITDA margins expand to ~48–56% due to favourable mix (exports + AMR assays); among the highest in Indian diagnostics manufacturing
  • Exports up ~50–110% YoY, export mix rises from ~11% to ~18%+; UK subsidiary (TRUPCR Europe) grows ~40%+ CAGR, opens doors to global tenders and long-term contracts
  • Customer base expands from ~400 to ~600 labs; TRUPCR kits sold in 45+ countries; sticky relationships with labs due to validation + switching costs
  • FY24–26E revenue CAGR ~22%, PAT CAGR ~20–25%; Q1FY25 PAT +77% YoY signals operating leverage kicking in
  • Launched 3 AMR assays (Carbapenem, Acinetobacter, Cephalosporin); 5 more in pipeline; strong global demand due to antibiotic resistance focus
  • ₹175–180cr cash (~70%+ of balance sheet); zero debt; ex-cash ROCE >100% highlights capital efficiency of core business
  • Trading ~20–25x FY26E EPS despite superior margins, clean balance sheet, and export runway; scope for rerating as exports scale sustainably
  • Stock derated due to fears over the margin-dilutive Coris acquisition, offering a GARP entry point.

9. HBL Engineering Ltd

  • One of only 3 original RDSO-approved vendors.
  • Massive ₹1,522 Cr order for on-board Kavach equipment on 2,200 locos
  • Kavach has ~40%+ EBITDA margins. Addressable market ~36,000 route-km; ₹18,000–25,000cr opportunity. Even 25% share implies multi-year revenue visibility
  • Only Indian maker of batteries for Electronic Fuzes (artillery). It also holds a strong position in submarine batteries (winning against Exide) and torpedo batteries (Varunastra)
  • only Indian player (and one of few globally) to manufacture Pure Lead Thin batteries. These are gaining rapid traction in Data Centers (replacing VRLA due to space/charging efficiency) and Defence (battle tanks for cold starts), offering a high-margin alternative to the commoditized lead-acid business.
  • The business is heavily dependent on Railways and Defence (government tenders). Delays in tender releases
  • Trading ~20–22x FY27E P/E vs multi-decade visibility in rail safety, defence electronics and energy storage. Rerating likely as Kavach execution converts to earnings
  • PAT CAGR >35% over FY25–28E; ROCE expands to ~25–28% with limited capex, improving working capital and falling interest costs
  • Electronic fuses, submarine batteries, missile and aviation batteries scale up from FY27. E-fuses carry ~40–45% EBITDA margins with limited competition
  • Electronics + defence batteries rise from ~15% to ~50% of revenue by FY27E. Margin-accretive mix drives structural EBITDA and PAT expansion
  • Approved supplier for India’s indigenous Train Collision Avoidance System; addressable rollout ~36,000 route-km at ~₹50 lakh/km, ₹25,000–28,000cr total opportunity. Current Kavach order book ~₹3,700cr with execution over FY26–27
  • Revenue mix transitions from batteries-heavy to electronics-led; Electronics share rises to ~50% by FY27E vs ~15% earlier, materially lifting EBITDA and PAT margins
  • Gun and grenade electronic fuses ramp from FY27; EBITDA margins ~40–45%, limited domestic competition, strong profitability lever alongside Kavach
  • Revenue CAGR ~45% over FY25–27E; PAT scales sharply with operating leverage, mix shift, and lower interest burden; ROCE improves to ~27–29% in peak years
  • Post domestic Kavach execution, management targets global ATP markets (US, Europe, Africa) where pricing is ~10x India; defence exports also scale gradually
  • ~22x FY27E P/E despite visible multi-year growth, high-entry-barrier products and improving return ratios; scope for premium as execution sustains

10. SJS enterprise

  • Consistent 20-quarter track record of outperforming auto industry volume growth driven by increasing kit value per vehicle.
  • Entry into Optical Cover Glass / Optical Plastics (currently 100% imported industry) serves as a massive value driver, potentially doubling content per vehicle.
  • High ROCE (~23%) and EBITDA margin (25%+) business with a net-cash balance sheet and strong free cash flow generation to fund organic/inorganic growth.
  • Reducing dependency on domestic 2W/PV via aggressive export expansion (targeting 14-15% revenue share) and recent marquee wins like Hero MotoCorp and Stellantis.

11. Tega industries

  • Global leader in mill liners and consumables for mining. High entry barriers, mission-critical product, sticky customers.
  • Structural tailwinds from copper and gold mining (electrification, EVs, energy transition)
  • Acquisition of US-based Molycop ($1.5bn) is a massive small fish eats big fish event - positions Tega as a dominant global leader (deal is ~10x its size).
  • Promoter Skin in the Game: Promoter sold all personal assets/land in 2000 to fund initial global expansion.
  • Order book ~₹1,000cr+, ~90% international, strong visibility into FY26–27
  • Strong Financials: Consistent EBITDA margins (~20%) with pricing power

12. CarTrade tech

  • Only profitable new-age auto tech player (unlike cash-burning peers like Cars24/Spinny)
  • Operates across discovery (CarWale, BikeWale), remarketing (Shriram Automall, CarTrade Exchange), trust layer (abSure) and classifieds (OLX India).
  • Massive operating leverage playing out – Revenue growing ~30% while EBITDA/PAT doubling
  • 90% organic traffic which means lowest customer acquisition cost in the industry; hard to replicate
  • OLX Acquisition trigger: Acquired at distress value, now highly accretive; creates near-monopoly in used car classifieds
  • Added ~30–40mn monthly users, doubling platform reach to ~75mn MUVs with ~95% organic traffic. Loss-making CTX shut; focus now on profitable classifieds with paid listings, subscriptions and ads
  • Organic traffic dominance keeps acquisition cost minimal. Incremental revenue drops straight to EBITDA. Margins expand from ~23% to 30%+ over FY25–28E
  • FY25–28E revenue CAGR ~25%, EBITDA CAGR ~37%. EBITDA margin expands from ~23.5% in FY25 to ~30%+ by FY28 as monetisation scales without CAC inflation
  • Asset-light model: 97% of auto malls leased; fixed costs are stable leading to non-linear profit expansion
  • Cyclical tailwind: Beneficiary of new car inventory clearing + structural shift to organized used car market

13. Privi Specialty

  • India’s largest aroma chemical exporter; >20% global share in 10 key products, 75+ product portfolio, supplier to almost all large global F&F players
  • DHMOL (“God molecule”, used in ~99% of modern perfumes), Amber Fleur, Terpineol drive ~60% revenue; high utilisation, repeat orders, strong pricing power
  • ~70% export mix; global clients diversifying supply chains away from China, benefiting a reliable, integrated supplier like Privi
  • FY25–28E revenue CAGR ~23–27%, EBITDA CAGR ~30–34%, PAT CAGR ~40–45% driven by mix shift, operating leverage, and new products
  • PRIGIV JV produces high-complexity, low-volume fragrance molecules; sticky offtake, 20%+ EBITDA margins, meaningful contribution from FY27 onwards
  • EBITDA margins sustained at ~22–25%; ROE ~25% and ROCE trending toward low-20s as asset turns improve and high-margin products scale
  • Merger with Privi Fine Sciences adds bio-based molecules (furfural, CP, maltol). New products deliver >40% gross margins; contribution rises from low single digits to ~25%+ over next few years
  • Core capacity expands from 48k MT to ~66k MT by FY28; additional 18k MT green chemistry capacity in FY27; capex largely brownfield, fast payback
  • One of only 4 global players (and only Asian) using CST instead of GTO; 15–20% raw material cost edge + price stability via long-term contracts; margins structurally higher vs peers
  • New JV with Givaudan (top global player) commercializing now; secures long-term offtake for high-margin specialty ingredients.
  • Shift from commodity to value-added products (Camphor, Menthol) driving EBITDA margins north of 20% despite macro headwinds
  • Trades at ~22–25x FY28E EPS with ROE ~25% and improving ROCE. Premium justified for global leadership, margin durability, and multi-year growth runway

Apologies for any errors. Some of these notes were written a few months back.

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Also add % wise allocation, it will be more interesting read

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I’ve recently started tracking stocks in the auto-ancillary sector:

  • From a sector-rotation perspective, auto ancillary sector is currently leading
  • Rising per capita income and wealth effect expected to drive sustained demand for personal mobility
  • Over the past decade, auto ancillaries have delivered ~24% annualized returns versus ~20% for OEMs, driven by higher ROCEs, better pricing power, and rising content per vehicle.

Below are my notes on select small and mid-cap names.

1) Endurance Technologies

Key metrics

  • ROCE ~17%, ROE ~15%, EBITDA margin: ~14.3%
  • 3Y sales CAGR ~15%, profit CAGR ~18%

About

  • Market leader in aluminium die-casting and 2W suspensions (~40% share in front forks, ~37% share in shock absorbers).
  • Shift from low-margin castings to proprietary systems (inverted forks, disc brakes).
  • Supplies must-have systems: suspension, braking, alloy wheels.
  • The management targets a 20% ROCE and is disciplined with capex.

Growth drivers

  • ABS mandatory for all 2W <125cc from 2026
  • Entered into EV via Maxwell Energy; EV orders scaled from ₹0.9 bn to ₹3.8 bn.
  • reducing its concentration risk on Bajaj by winning orders from Hero, HMSI, TVS, RE.
  • they’re also entering new non-auto segments like Solar Dampers (won ₹200 cr order) and expanding into 4W suspensions with a South Korean technology tie-up

Risk

  • Auto cyclicality; execution risk in new verticals.

2) UNO Minda

Key metrics

  • ROCE ~18.8%, ROE: 17.5%, EBITDA margin: 11.2%
  • 3Y sales CAGR ~26%, profit CAGR ~40%

About

  • holds dominant market shares in switches (~70%), horns (~50%), lighting (~20%).
  • Breadth across OEMs and segments (2W, PV, CV, tractors) reduces platform risk.
  • management has a history of successful capital allocation through strategic acquisitions (Clarton Horns, Rinder, Delvis, Harita) and productive Joint Ventures (Kosei, Tokai Rika)
  • Long validation cycles → high switching costs.

Growth drivers

  • Expansion into electronics, sensors, controllers, alloy wheels, seating.
  • EV-agnostic portfolio: BMS, OBC, DC-DC, ADAS.
  • Premiumisation tailwinds increase content per vehicle.
  • Proven M&A + JV execution.

Risk

  • Expensive valuation (67× P/E leaves low margin of safety).

3) Suprajit Engineering

Key metrics

  • ROCE ~11%, ROE ~6%, EBITDA margin: 12.9%
  • 3Y sales CAGR ~21%, profit CAGR -19%

About

  • Global leader in control cables (2W, PV, CV, off‑highway, non‑auto).
  • building non‑cable businesses (halogen/LED lamps, other components)
  • Core product (control cables) loses relevance in 2W EVs.
  • ROCE and ROE have steadily declined over a decade.

Concerns

  • Phoenix Lamps exposed to halogen → LED disruption.
  • LDC acquisition starts with negative EBITDA and execution risk.
  • Rising leverage (~0.6× D/E) and margin pressure.
  • Capital deployed into structurally declining segments.

Offset

  • Global footprint, strong aftermarket replacement demand.

Verdict

  • Value trap risk unless non-cable businesses scale profitably.

4) Sansera Engineering

Key metrics

  • ROCE ~13%, ROE 10%, EBITDA margin: 17.1%
  • 3Y sales CAGR ~14%, profit CAGR ~18%

About

  • High‑precision forgings + machining of engine, transmission, suspension, and chassis components for 2W, PV, and off‑highway; not easily commoditized
  • Transitioning from a pure auto-component player to a precision engineering partner for Aerospace and Defense
  • The management is led by technocrats (IIT/IIM alumni)
  • Sticky OEM relationships; ₹18–20 bn order book.
  • Export‑heavy: building out to non‑Indian OEMs and non‑auto (industrial, aerospace, defence, semiconductor – “ADS”).

Growth drivers

  • Secured long-term contracts with global majors like Airbus (A220 door program) and are targeting INR 1,000 crores in ADS revenue within three years
  • Management targets 40–50 % CAGR in ADS revenues and is invested in MMRFIC (≈30 % stake) to access mmWave radar and semiconductor packaging technology.
  • In-house SPM capability improves margins and capital efficiency.

Risks

  • Despite diversification, roughly 76 % of revenue still comes from ICE automotive.
  • Europe exposure adds macro and FX risk.
    • 60% of order book and growth strategy relies on international markets. This exposes the company to geopolitical risks, freight cost volatility, and economic slowdowns in regions like Europe
  • MMRFIC execution risk (tech unfamiliarity).

5) SJS Enterprises

Key metrics

  • ROCE ~23%, ROE ~19%, EBITDA margin: 26.4%
  • 3Y sales CAGR ~27%, profit CAGR ~28%

About

  • Market leader in aesthetic & decorative components (decals, overlays, 3D logos, dials, decorative trims) Very few organised competitors with similar tech/tooling depth.
    • micro‑niche; extremely high gross margins and asset‑light business
  • Direct beneficiary of premiumisation.
  • High SKU complexity → strong pricing power.
  • insane track record: delivered 23 consecutive quarters of outperformance relative to the auto industry

Growth drivers

  • New OEM wins (Hero Motocorp) and export orders from global OEMs like Stellantis and Autoliv
  • diversifying beyond traditional aesthetics. The Cover Glass initiative and expansion into export markets (targeting 14-15% revenue share by FY28) provide a clear long-term runway
  • Asset-light expansion; strong FCF.

Risk

  • Niche business; growth depends on premium demand.

6) RACL Geartech

Key metrics

  • ROCE ~12.5%, ROE 12%, EBITDA margin: 19.9%
  • 3Y sales CAGR ~15%, profit CAGR ~2%

About

  • High-precision gears for premium OEMs (BMW, KTM).
  • Unlike commodity gear suppliers, RACL focuses on high-precision components for premium motorcycles and is export-heavy.
  • ~70%+ revenue from exports – partially hedges Indian auto cycles, but adds FX / macro exposure.

Concerns

  • Interest cost exceeded PBT in Q1 FY25.
  • Working capital stretched (inventory ~394 days).
  • Heavy Europe exposure (70% of revenue from europe)
  • The aggressive capex plan (₹250 Cr planned until FY27) combined with slowing sales could lead to severe operating deleverage.

Verdict

  • High risk until leverage and WC normalize.

7) ASK Automotive

Key metrics

  • ROCE ~27%, ROE ~26%, EBITDA margin: 12.3%
  • 3Y sales CAGR ~21%, profit CAGR ~45%

About

  • Market leader in 2W brake shoes (~50% share).
  • Safety is regulation‑driven, non‑discretionary: ABS/CBS, stricter braking norms → higher content per vehicle.
  • Deep OEM integration; safety parts have high qualification hurdles & long validation making it hard for new entrants.
  • delivered strong growth in recent quarters and expanding margins to ~13%.

Key risk

  • ABS shift may reduce content per vehicle (disc brakes vs drum).
  • High customer concentration (top 3 >50%).

Offset

  • Strong execution, margin expansion, capital efficiency.

8) Pricol

Key metrics

  • ROCE ~22%, ROE ~17%, EBITDA margin: 12.8%
  • 3Y sales CAGR ~20%, profit CAGR ~46%

About

  • World’s 2nd largest manufacturer of driver information systems (DIS) for 2-wheelers; holds a commanding market share: ~50% in 2-wheelers, ~70% in Commercial Vehicles, and ~90% in Off-Road Vehicles.
  • mitigated the EV risk by developing EV-agnostic products like electric coolant pumps and BMS
  • Strong OEM relationships built over decades (TVS, Hero, Bajaj, Tata, RE, JCB etc.) → sticky, repeat platforms.
  • sold off loss-making international subsidiaries (Brazil, Europe) and focusing on profitable Indian operations
  • Capacity: from ~₹2,200 cr to ~₹3,500 cr with ~₹350–400 cr capex; mgmt expects EBITDA margin from ~12% to ~14.5% over time
  • Partnerships:
    • Sibros (connected telematics, ex‑Tesla team)
    • BMS PowerSafe (BMS)
    • Working with global brands (Caterpillar, Ducati, Harley).

Growth drivers

  • tech migration from mechanical clusters to TFT/connected digital clusters
  • diversified into high-potential segments like Disc Brakes (supply started to 6 OEMs), Sensors, and E-cockpits

Risk

  • Execution in electronics must stay ahead of tech curve.

9) FIEM Industries

Key metrics

  • ROCE ~27%, EBITDA margin 13.3%
  • 3Y Sales cagr: 15%, 3Y profit CAGR ~30%

About

  • Leading 2W lighting & signalling supplier (headlamps, tail lamps, indicators)
  • LED transition is the key tailwind: higher ASPs + better margins vs halogen/bulbs

Risks

  • High customer concentration (HMSI + TVS ~70% of sales).
  • Promoter stake sales.
  • LED commoditisation risk over long term.
    • Management admits prices could reduce by 50% over a long horizon due to economies of scale.
  • Startup EV OEM exposure.

10) Lumax Auto Technologies

Key metrics

  • ROCE ~19%, ROE ~20%, EBITDA margin: 14.2%
  • 3Y sales CAGR ~34%, profit CAGR ~35%

About

  • One of the clearest content per vehicle compounders:
    • Strong PV exposure which contribute ~53% of sales.
    • Interiors, plastic moulded parts, mechatronics
    • Alternate fuel systems via Greenfuel
    • Interiors & trims via IAC.
  • Smart inorganic moves:
    • Majority stake in Greenfuel (CNG/LNG/H2 kits, EV solutions)
    • Increasing stake to make IAC (interiors) a wholly‑owned subsidiary – direct exposure to EV/PV premium interiors.
  • EBITDA margins have expanded from single digits/low teens in earlier years to ~14.6% in FY25, with management explicitly targeting 20% margins by FY31.
  • Management has consistently outperformed industry growth

Growth drivers

  • Premium interiors, alt-fuel systems.
  • Order book ~₹1,350 cr, mostly new business.

Risk

  • Integration and margin execution.

11) ZF Commercial

Key metrics

  • ROCE ~20%, OPM ~16%, EBITDA margin: 22.1%
  • 3Y sales CAGR 14.4%, profit CAGR ~52%

About

  • Leading commercial‑vehicle braking & control‑systems player (legacy WABCO India).
  • Safety‑critical content (brakes, ABS, ESC, ADAS/driver assistance for trucks & buses) – regulation + safety are structural drivers.
  • Very high asset turns and strong ROCE because tech IP and systems integration matter more than sheer capex.

Risk

  • CV cycle sensitivity.

12) Sandhar Technologies

Key metrics

  • ROCE ~12%, OPM ~9%, EBITDA margin: 10.3%
  • 3Y sales CAGR ~19%, profit CAGR ~35%

About

  • Wide product basket: Mirrors (IRVM/ORVM), Locking systems & latches (mechanical/electronic), Sheet‑metal, plastic mouldings, assemblies, Basic electronics (regulators, rectifiers, DC‑DC, USB chargers) and EV components (DC‑DC, chargers, controllers) via newer initiatives.
  • International ops drag returns.

Concerns

  • High customer concentration (50% of revenue from 2 clients)
  • Smart lock adoption slower than expected.
  • Moat is weaker at this stage (more competition in mirrors/locks/sheet‑metal vs high‑precision or aesthetics niches).
  • Frequent guidance misses.

13) Belrise

Key metrics

  • ROCE/ROE ~14%
  • 3Y Sales CAGR: 15%, profit CAGR: 10%

About

  • Transitioning from a simple component supplier to a system supplier, delivering complex, pre-assembled systems like chassis and exhaust assemblies.
    • this will increase client stickiness and cpv in the premium 2W and EV segments where CPV is significantly higher
  • Powertrain-agnostic portfolio (~70%). Acquisitions like H-One allow them to manufacture high-tensile steel critical for lightweighting EVs, creating a new structural moat.
  • Management has delivered on their IPO promises of debt reduction and is successfully executing a pivot to high-margin 4W and EV segments.
  • raised ₹2,150 Cr via IPO in May 2025 and utilized ₹1,618.3 Cr to prepay debt reduced the debt-to-equity ratio from ~1.1x to ~0.29x

Risks

  • The company has an aggressive ₹800 Cr capex plan and is integrating recent acquisitions (H-One, MagFilters).

14) Shriram Piston and Rings

Key metrics

  • ROCE ~25.7%+, ROE ~23%, EBITDA Margin 22.8%
  • 3Y Sales CAGR: 19.8%, profit CAGR: 45.7%

About

  • Market leader in pistons, rings, and engine valves with deep OEM relationships (Maruti, Honda, Tata, Bajaj, global OEMs).
  • Core business is structurally profitable, with high entry barriers driven by metallurgy know-how, precision machining, and long OEM validation cycles.
  • Aftermarket contributes ~27% of revenue, providing steady cash flows and partial insulation from auto cycles.

Growth optionalities

  • Well positioned for alternative fuels:
    • Sole supplier of pistons and valves for Bajaj’s CNG bike (Freedom 125).
    • Products validated for high ethanol blending (up to E85) and hydrogen-ICE applications.
  • Management is actively reducing long-term ICE concentration through diversification into powertrain-agnostic and EV-linked segments:
    • EMFi: EV motors and controllers.
    • Takahata: Precision injection-moulded plastic components.
    • Antolin India (Dec 2025): Automotive interiors business (~₹1,179 cr revenue), significantly expanding SPRL’s non-engine exposure.
  • Plastics business alone expected to scale to ~₹500 cr revenue
  • Strong balance sheet and cash flows allow experimentation without stressing core returns.

Risks

  • Long-term decline of ICE volumes remains inevitable.
  • Execution risk is meaningful: rapid transformation into diverse, non-adjacent businesses (EV motors, plastics, interiors) where SPRL lacks long operating history.

I wanted to study fewer <15 companies. I filtered out Rico Auto due to low ROCE, Banco because of past governance issues, Exide due to an existential technology threat, Craftsman because ~50% of revenue comes from the powertrain segment, Varroc due to a poor capital allocation track record, Alicon due to a threat to its core product line, and Steel Strips Wheels due to stagnant margins despite premiumization and weak free cash flow.

Among these, SJS Enterprises, UNO Minda, Endurance, Lumax Auto, and Pricol look the most promising at this stage. let me know if you’ve any differing views

These companies demonstrate superior capital efficiency and stronger pricing power than their peers. Endurance and UNO Minda offer stability through market dominance, while SJS, Lumax, and Pricol are direct beneficiaries of the premiumization trend (better aesthetics, interiors, and digital screens) that increases content per vehicle regardless of the engine type

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