Shriram Pistons & Rings Ltd

Stock Opportunities
20

Q4FY24 concall Highlights

  1. 3000 Cr revenue in FY 24. Grew 2x the market growth and expecting to grow at the same rate.
  2. Domestic sales 2390 Cr, Export 5182 Cr. Export is down as EU, US auto sales are flat
  3. Domestic PV and 2W would do fairly decent ( ~7% growth ) based on the order that they have. CV will still remain flattish
  4. Aftermarket would keep doing good as there are around 100 million vehicles ( 10 Cr ) which at different phases of engine overhaul require to change the piston. Thus increasing the demand
  5. Additional Piston ring at Pitampura which is almost booked out
  6. Coimbatore has the EMFi segment , where additional land has been bought to expand the business,. Q3FY24 expectation is 5 lakh motors ( expecting almost 500 Cr topline )
  7. Precision molding segment will give 270 Cr
  8. JV partner Kolbenschmidt is under a PE firm Comitans Capital as the parent wants to focus on defense. SRP is more or less independent of it.
  9. global heavyweights in piston suppliers are Mahle, Kolbenschmidt and Federal Moghul.
  10. Management is open to acquiring a company in the auto space. However, they would be powertrain agnostic. Cash 862 Cr
  11. Ethanol vehicle content per vehicle will be high and they are pioneers in this space. Solution is present to cater to 85% blending as well.
  12. Diversified into snowmobile and marine pistons.

Bull case scenario
revenue - 3400 Cr from legacy business + 270 cr from precision injection and ~500 Cr from EMFi segment = 4170 Cr

Risk

  1. PV slowdown

Disclaimer : Invested and added recently .

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