From my previous post here…
And many more perspectives to be evaluated
** Are the acquisitions adding value or are they being value dilutive?*
** Are the new categories improving unit economics?*
** How is the company managing the global market complexity since 2016?*
** What kind of investments are needed to become a truly global player than just being a domestic player who also has international operations?*
** Is the management articulating the vision and the path to becoming much stronger than what they currently are?*
** Succession planning and professional management to help them in this journey?*
There is tangible progress on some of the points based on the past few quarters.
The acquisitions have now been stabilized with Trifa, Luxlite shedding unnecessary flab and streamlining operations over the past 2-3 years. Wescon now works at good margins (Q4 came in close to 20%) and there is a possibility that the non automotive manufacturing will be done partly based out of India rather than just the Americas. Today we have more clarity on how these acquisitions can add value going forward.
There have been some hiring decisions over the past 3-4 years where the management layer has been beefed, this is no longer a business that runs on the efforts of a single family. The latest hire is a global professional with 30+ yrs experience and strong relationships with customers in the cables segment. To strike larger and longer time deals with global OEM’s, it is very important to hire someone who has done it in the past and can speak the language that customers understand. Look back at the hiring of Indian IT Services majors through the period starting from 2014, a good bulk of the large IT deals that are materializing today is due to these hiring investments that these businesses made.
The PLD division has proven its credentials by becoming a preferred supplier to the likes of Osram, Bosch and Philips. Scaling up here should be more about capacity and operations than about forging new relationships.
Business has made a small start on product development where they are evaluating electronics components and sensors they can make and sell, they have already gotten into a couple of products like brake shoe and gearbox. These will take time to scale but a strong product development plan depends on the ability to commit capital to research and to structure deals with global makers that have the technology in place. Balance sheet is now cash surplus and funding R&D should not be too much of a challenge from here.
Possibilities look interesting from here since the existing pieces can scale well while they can invest into newer areas like a Minda Industries does.
Disclosure - Invested for self and customers, I am a SEBI registered IA and manage external capital.