Talbros Automotive Components Limited (TACL)

Talbros automotive Components limited (TACL) is flagship company of the Talbros Group established in 1956. The Company initially started with manufacturing automotive and industrial gaskets in collaboration with Coopers payen limited, UK. The Company is headquartered in Gurgaon, with nine manufacturing facilities located in the vicinity of key OEMs.

Promoters are continuously increasing their shareholding as well the dividend payment over the last few years.

Company Product Portfolio
TACL started it’s manufacturing with Gaskets division and over the last few years the product portfolio expanded to other auto components such as Forgings, Suspension systems, Anti-Vibration products and Hoses along with Gaskets. These products service the growing needs of customers across the two-wheeler, passenger car, commercial vehicle and farm equipment segments. TACL plans to add Heat Shields, Industrial Gaskets, Semi-Corner axle assembly, Engine Mounts to their product portfolio by 2017.

Existing and Proposed portfolio for 4 wheeler

Gaskets and Forgings is part of standalone business where as Automotive Gaskets, Suspension systems and Anti-Vibration parts business is in the Form of JV’s.

Joint Ventures:

The Company entered three joint ventures with global auto component leaders to create multiple growth engines.

  1. **Nippon leakless Corporation (Japan):** With annual sales worth $200+ million, it is one of the largest global manufacturers of gaskets for four-wheelers, two-wheelers, power equipment and industrial uses. This is a 60:40 joint venture with Nippon leakless Corporation established in 2005 to manufacture non-asbestos automotive gaskets for honda and other Japanese OEMs.

The total turnover of the JV in fy15 stood at 10,269.98 lacs, increasing at a CAGR of 15% since fy10. This JV reported a net profit of 15.21 cr in 2015 (13.25 cr in 2014)

  1. **Magneti Marelli s.p.a. (Italy):**  Part of the fiat Group, Magneti Marelli is a €6 billion company and its suspension business generates over €470 million in global revenues. 

A 50:50 partnership (2011) whose production commenced in April 2012 for manufacturing suspension systems for passenger vehicles and pick-up trucks. The joint venture also manufactures control arms, knuckles, front and rear axles. earlier, Talbros would manufacture only the control arm; following the joint venture, the Company possesses the capabilities to address entire chassis system-related needs.

This JV reported a revenue growth of 10% from 5,844.02 lacs in 2013-14 to 6,437.95 lacs in 2014-15. This JV reported a Net Loss of 3.07cr in 2015(-1.7cr in 2014)

  1. Marugo rubber (Japan): a $300 million company and a global leader in the anti-vibration products and hose segments for OEMs. The 50:50 JV between Talbros and Marugo rubber was commissioned in 2013 to localise the production of rubber hoses for Maruti suzuki. The JV allowed the Company to directly cater to Maruti suzuki at its Manesar plant, reducing lead times.

The segment reported a revenue growth of 25% from 1,018.62 lacs in 2013-14 to 1,275.28 lacs in 2014-15 on account of increase in sales of mounting mufflers and hangers at Maruti suzuki. This JV reported a net loss of 0.8cr in 2015 (-1.78cr in 2014).

Furthermore, the company has also ventured into making heat shields in liaison with Sanwa Corporation (Japan), primarily used to insulate heat and sound in automobile engines, electric generators and exhaust pipes. This is expected to go main stream during FY17E for which they have already received orders from Volvo and this can be boosted further with their eminent passenger and commercial vehicle clientele to tap into new agreements.


Financial Notes:
Company incurred a cost of approximately Rs 1.9 crores towards the terminal benefits of the employees in the chennai plant during last quarter which forms a part of exceptional expenses for the year. In 2014, on account of sale of Chennai Land 8cr is added as exceptional income to Net Profit.

Two of the manufacturing units Sitarganj and Haridwar in Uttaranchal which last year have moved from 100% tax exemption to 30% tax exemption bracket during the year are increasing our tax outgo.

Considering these additional expenses and Tax Outgo Company performed well and reported better earnings in the last year and continue to maintain the good margins in the industry.

Strong Clientele:The Company’s institutional clientele comprises prestigious OEMs like Ashok leyland, Bajaj auto, Cummins Group, eicher India, Volvo eicher Commercial Vehicles limited, Escorts Group, Force Motors, General Motors, Hero honda, Honda, Hyundai, John deere, Mahindra & Mahindra, Maruti suzuki, suzuki, Tafe, Tata Motors, Tata Cummins, simpsons, spicer Group, Musashi, ognibene, american axle among others.

Its international customers comprise Volvo powertrain, Carraro, Dana Corporation, KM pbrand, Maxi force and GKN driveline among others.

Value Factors

  1. The Company is a market leader in the country’s gasket segment; its 38% share is nearly three-fold its nearest competitor. The Company enjoys a near monopoly in the domestic two-wheeler industry (92% market share).

  2. Single Source Supplier for 5 of the customers includes Hero MotoCorp, Honda Motorcycle and Scooters, Bajaj and Tata Cummins.

  3. In 2014, Identity as a 100% asbestos-free Gasket player, making it possible to export to countries with some of the most stringent norms. The Company received its first order from Volvo to supply heat shields
    in the US and Mexico. Besides, the Company is a single-source supplier to Cummins India and, following its asbestos-free status, has become eligible to supply products globally to Cummins.

  4. In the current fiscal there are about 18 2-Wheeler launches by Hero, Honda and Bajaj. This should provide steady sales to company for next few years.

  5. The Company introduced a new product line (steering knuckles) and commenced production of lower control arms for TATA Motors models (Zest and Bolt).

  6. Set up a hose plant in Manesar to cater to the growing needs of Maruti Suzuki, Planning to carved out a larger share of Maruti suzuki’s needs through our joint venture businesses. The Company launched a control arm for Maruti suzuki (NG alto K10), increasing its share of MSIL control arm sourcing from 40% to 50%.

  7. The Company received its maiden suspension system order for the Bajaj RE60 quadricycle. The Company is optimistic of its prospects on the basis of bajaj RE60 quadricycle orders where the Company has designed the entire chassis spectrum (front-axles, semi-corners, control arms and knuckles). This product launch can potentially graduate this joint venture to the next level.

  8. Expanded customer base to include MNCs like Ognibene and American axle.

  9. The Company expects exports to account for 20% of the turnover from 13% currently, following its asbestos-free status. But this is a difficult target to achieve considering Euro growth concerns, and recent Volkswagen scandal.

  10. The Company’s plants were audited by international OEM giants, resulting in orders from Cummins, Daimler, Volvo and Harley davidson.

  11. Closed its gaskets facility in Chennai to consolidate capacities and moderate costs.

  12. With correction in Steel and Oil prices a revival witnessed in the recent auto sales data and new launches TACL poised to benefit in the coming quarters.

  13. TACL entered into a technology arrangement with Sanwa Corporation (Japan) for heat-shields. The Company already supplies heat shields to several of its major gasket customers. With the use of heat shields expected to become the norm in the Indian passenger car market, the Company’s dedicated heat shield line (expected to go on stream in 2015-16) is poised to benefit demand.

  14. Currently the heat shield products are used in the manufacture of heavy and medium commercial vehicles in India, they are not used in passenger cars (except those that are exported). Management expects that as Indian automobile engines become increasingly compact and emission standards more demanding, the use of these products will become mandatory for Indian passenger cars as well.

  15. TACL recently got international order from turkey’s tractor manufacturer. Similarly discussions are going on with Iran manufacture as well.

  16. Import of raw material currently happening from US manufacture, the same will happen from Europe facility (same manufacture) saving 1cr and reduce the delivery time from next quarter on wards.


  1. Auto sector growth is directly linked to company’s growth, As SIAM (Society of Indian Automobile Manufactures) expects 8-10% growth in Auto segment company should outperform the industry growth.

  2. Euro depreciation or rupee appreciation will have certain level of impact on financials. But current scenario, Euro appreciation and Rupee depreciation is good for company.
    Product export realization was low last quarter, if last year was Rs.80 per Euro, in Q1 quarter it was Rs.69 per euro.

  3. Company had nearly 131cr debt on books, but certainly recent interest cuts will have positive impact on company financials. Monetization of Chennai property will be booster, management already have the plans to offload this property and waiting for correct price.

Disclosure : Currently the stock is trading @125 rs and this stock weighs 4% of my portfolio.


But as they have their clients as big names wouldn’t there margins would be further squeezed and also the asset turnover is low .

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It may not a matter of concern at this stage considering the below fact.

The price realization from 2/4 wheeler vehicle is less than 1000rs.
TACL currently gets 700rs as their products price for every 4 wheeler sold by their customer. This 700 is very small compared with car price, hence squeezing of margins by car manufacturers is not a big question at this juncture.

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@Chaitu_1614, Have you collected any information on the market opportunity/size for each their products ?

Also, if one has to invest in such companies for long term, wondering what impact their products will have, if electric cars/vehicles gain more market share going forward (I know this could take 5-10 years). Please refer below to a snippet from one of the studies on electric vehicles (EVs)

The question is, would TACL products be one of the fewer parts needed for EVs ?

for last 3 years both topline and bottomline is showing muted growth… Your views on that?

that is the reason Talbros is range bound 110 to 120 … I think a major run up in sales is requried for price to move north.

Good results

Investor presentation… looks like company is on right track

Is anyone tracking this story still?

Just came to my radar where I see Dolly Khanna recently picked up large stake in this company and also most of its clientele are seeing some big recoveries post covid.

Just trying to check how much of the capacities are under utilization and is there any need for new capex , if any.

Happy investing.

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Q4 FY21 Good Results for Talbros. EPS more than tripled QoQ and it was -ve last year same Q.

However, need to add that a little more than half of the profits were from exceptional items (monetized their chennai property) !

Without exceptional items QoQ profits improved by 28% ! Also OCF increased 78% !

Disc: Invested


Latest shareholding pattern: Vijay Kedia bought 2.7%, Dolly Khanna increased stake and promoters have bought some shares. Bumper quarter incoming.


Investor presentation for Q3 -

anyone attended con call today ?

Q4 FY 22 Results Press Release

Chip shortage continue to dampen the performance.

Commenting on the performance Mr. Anuj Talwar, Jt. Managing Director, Talbros Automotive
Components Limited said:
“FY22 has been a challenging year for our industry as a whole. Despite the situation at hand, our
Company has outperformed at all levels.
Rev grew by 29% to Rs. 585 crores, EBITDA grew 29% to Rs. 83 crores and our PAT grew by 84% to Rs. 45 crores which is our highest achieved profits.

Our JV’s have also done well in FY22. As a group, we have achieved highest ever turnover of Rs. 879
There has been a shortage of the semiconductor chip which is affecting the industry and our
Company. Going ahead, once the shortage reduces, we aim to grow at an even faster rate.
We are
closely monitoring the commodity market and continuously working with our customers on the passthrough front.
We are continuously looking to increasing our share with existing customers and add new customers
across geographies which will help us grow and gain market share in the coming years.”

Dividend Declared: Rs 1.50 per share.



My notes from conference call
-Business catering to all segments and ~25% export hedges against the challenges in demand
-Management is positive about healthy demand for its products
-Management guides for double digit revenue growth and don’t want to provide exact target revenue growth due to uncertain environment
-expect to maintain the margins of 14%
-They have added few clients in domestic and export market. They will announce in a month of so.
-Utilization across most of the products is 60-90%. Capex planned for product segments for which utilization is 90% or so.


IMP points Talbros Q4 FY22 con call
• Auto industry degrow by 6% FY22
• All segment- PV, CV, 2 wheeler, 3 wheeler below 2019 levels
• In Gasket business have >50% share in India market
• Heat shield division started – good export traction here- Senior engineer from Sanwa is here for 45 days to install machines & visit customers -order Bok is 35-40 cr
• Forging business is 48% export, suppling for EV from this segment globally
• Marelli JV making chassis, rear & front axles is supplying lot of components to EV market – TATA motors
• Exports 24-25% of turnover & goal is 30% over 2-3 years (15-16% 3 years back)
• Medium term challenges in terms of RM inflation * logistics
• Open for inorganic opportunities but lot of growth can be achieved in organically. Heat shield has huge potential, Gaskets business with cummins (pleased to announce that at present my capacity is around 8000 to 10000 per month and keeping in that our company is expecting to double this volume and they have ordered us to setup one more set of lines, which will be operational by October of this year) & export customers like GLR have huge scope. Exports markets are looking good, globally lot of OEM’s are looking to shift from heavy weight forgings to light weight which we are working on (Clarity post Q1)
• Marugu Rubber is working with Maruti for new kind of Hoses for new biofuel engines
• LOHUM is not a Talbros investment, its invested by family office
• R&D we are working on light weighted heat shields, we are trying to work on under body heat shields, we are working on some cylinder gaskets for a large OE customer, we are working on some other components for electric vehicles or light weighting suspend control arms
• In Tata Motors from our Marelli joint venture for the EV vehicles we are supplying our products, proud to say that in Tata Motors PV segment which is ICE engine and EV of a product, which is called the suspension control arm our market share 70%. We are making more inroads with Ashok Leyland also, although our large customers in our gasket division is coming followed by Tata Motors and Volvo Eicher. Ashok Leyland being located in the south, we are now making a few more inroads into them as well, so that is an ongoing process
• Developing smart heat shield for TATA EV vehicle
• Commencing production for heat shield in June for Hyundai & Kia
• Localisation policies & PLI is forcing co’s like Hyundai & Kia to procure more locally & we are getting traction- Import substitution is happening
• Maruti is giving us heat shield business which they are currently importing
• ICE engines will be there next 3-4 years with market consolidating, EV penetration in all segments will take 3-4 years to cross 10% market share mark
• At present 3-4% of revenue is EV
• EBITDA margin 14% should be maintained next year
• Cannot give guidance due but should see double digit growth
• Product pipeline & new export customers will be announced next 1-2 months
• Gaskets capacity 80%, Forgings 65-70%, Machining 90%, Marelli 70%, Marugo Rubber 90%, Hoses 40% (Can go up to 70%things are moving), Nippon leakless 65%
• Capex 20Cr in gaskets heat shield side – can do 38 cr monthly then
• Forging Capex 15Cr – can do 22CR monthly
• Single source supplier for Cummins, Bajaj, ECB, 60% TATA motors


Imp points Talbros Q1FY23 Con call:

  • Have entered Agri construction & off-road segment for overseas market
  • Out of new orders, 18% account for Electric Vehicle (EVs) segment for leading established domestic OEM for PV segment
  • Received multi-year orders worth Rs. 400+ crores from domestic and overseas customers across all the divisions and varied segments. The order spans across newly invested technologies such as heat shields for which we have secured new customers in the Domestic PV space. 30% of this is export order book
  • RM price increase can be passed on, recovery takes 1 qtr
  • Have been added by Hyundai, Maruti, TATA Motors strong relationship with Marreli entity, similar for JLR. 2w & OEM looking strong too
  • Across divisions utilisation is from 70-90%
  • For this qtr order book from Maruti & tata is healthy
  • In QTR1 heat shield business 8cr, for Hyundai commercial production should start in 1 month, in discussion with Maruti. In next 3-4 years this business can touch 60-70CR
  • Export should be higher this year compared to last year
  • Globally see a huge potential for Gaskets & heat shields
  • On export 30-40% currency hedging is done, on imports nothing
  • CAPEX Gasket -18-20 CR (including heat shield), Forging -12-15CR, others 10-12 CR
  • 30th JUNE 92 CR is total debt (o.31 debt equity)

What are their revenue projections for 2025

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I am New To Value Picker Recently Discoverd ,and found amazing community !! I have been in this market for last 3 Years and Focused on Equity Research

Coming Back To Your Question on Talbro’s Automative

Industry seeing a Tailwind in coming years due to demand Pick up Domestically and Internationally ,Although Lbit impacted due to Europe ,uk slowdown

Global gaskets and seals market was valued at $61.8 billion in 2020 and is expected to reach $78.6 billion by 2025, growing at a CAGR of 4.9 %.

The global forging industry was valued at approximately $85 billion and was expected to grow at CAGR of around 4% from 2021 to 2026.

The gaskets and seals market in India was valued at approximately $1.5 billion and was expected to grow at a CAGR of around 5.5% from 2021 to 2026.

Indian forging industry was valued at approximately $3.6 billion and is expected to grow at a (CAGR) of around 7.5% from 2021 to 2026.

Talbro’s Outlook

INR 1,000 crores is for a period of 5 years, number 1. It’s not 1 year – it’s around INR 200 crores per annum

Value added features like Noise Reduction, Emission Control, Heat Insulation at challenging temperatures and is a widely used on new generation engines including Hybrid and EVs

The company is in the process of closing more price increases to further improve margins & also the company is positive about the industry’s growth in the next year due to work on biofuels, capex policy, and pent-up demand for passenger vehicles

The company is aiming for capex of about INR 18 crores in the gasket business, including heat shield. It should be close to 20 crores INR in the Forgings. Marelli should cost between 30 and 35 crores rupees, and Marugo should cost 8 crores rupees.

Recent Product
EV : In EV product called cradle, this is the product, this is for the OEM based in Pune and cradle is a structure on which the motor sits, and that is a – I think the revenue of that 1 piece is INR 4,100, INR 4,200 per piece and the supply will start from August, September I think some initial supply will start. I think the major supply will start from the third quarter or maybe October, November.

Forging : it’s purely an Agri, off highway, off-construction product. So that will give a lot of buoyancy in the Forgings division starting next year, and that will only continue to grow because here, it’s a very interesting story. Here the customer is moving from castings to forgings

As per Con Calls

Sales Growth Likely To be 13-15%
EBITDA will be 14%
PAT growth Will be 13-15%

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Talbro_report_27-06-2023.pdf (345.4 KB)

Insightful report abut Talbro