Some counter take on Shriram Piston
Why It Looks Cheap : Valuation: Trades below 20x
ICE-Only Exposure: Core offeringsāpistons, rings, engine valves, and cylinder linersāare all tied to internal combustion engines (ICE), with limited relevance in an EV-led future.
EV Transition Risk: State governments are aggressively pushing EV adoption, making this a structurally declining segment over the long term.
Stock Performance: Since 2016, the stock is up just ~40%, reflecting sluggish demand expectations. Not a sunset industry, but certainly low-growth.
Limited Synergies in Acquisitions: The company is trying to diversify (e.g., lightweight parts using plastics), but injection molding is a very different manufacturing domain. Success will depend on whether they can build supplier relationships and scale effectively.
Small-Scale M&A: Recent acquisitions are modest in size (~2x EV/Sales), so thereās no clear valuation edge either.
Capital Allocation Concerns: While the company has strong cash reserves, it appears to be in an āopportunity cost of inactionā phase. The reinvestment strategy lacks aggressionāTCEās āEā (Energy) seems weak here.
EV Transition Outlook: ICE demand will persist in CVs, agri, and rural 2-wheelers, but EV adoption is accelerating sharply in urban marketsāfaster than many expected.
Right to Win?: While Shriram is entering the EV segment, players like Sona BLW are already far ahead. Execution and scaling will be key to justifying forward valuations.
EMF Acquisition still meaningful