*Stocks in News*
Wipro: The stock will be in focus as the IT services provider has received a multi-year contract to deliver Service integration and management (SIAM) services to HM Treasury (HMT). Wipro and HMT will collaborate to enable end-to-end SIAM services, from strategy, design, and implementation to running business-as-usual services such as day-to-day coordination of service integration across HMT's vendors.
Max Healthcare Institute: HDFC Asset Management Company bought 0.4 percent equity stake in the company via open market transactions on August 16. With this, its shareholding in the company stands increased to 5.18 percent, up from 4.78 percent earlier.
Greenpanel Industries: Rating agency ICRA has upgraded the long term ratings of the company to A+ (stable) and short term ratings to A1+, from A and A1, respectively.
Metropolis Healthcare: Vijender Singh has resigned as the Chief Executive Officer of the company. The company has agreed to release him from the position of CEO from the closing of business hours of August 17.
Talbros Engineering: The company has commenced construction on land acquired admeasuring 2.2 acre in Faridabad for setting up of new production unit.
SecMark Consultancy: The company said the meeting of board of directors is scheduled to be held on August 23 to consider issue of bonus shares to the equity shareholders. The board will also approve the proposal of migration of company from SME platform of BSE to Main Board of BSE Limited as well as listing on the Main Board of National Stock Exchange.
#WIPRO #METROPOLIS #MAXHEALTH #TALBROAUTO
Stocks in News
Ion Exchange India: The company reported higher consolidated profit at Rs 70.48 crore in Q4FY21 against Rs 28.86 crore in Q4FY20, revenue rose to Rs 445.15 crore from Rs 351.09 crore YoY.
Bandhan Bank: Reserve Bank of India granted approval for re-appointment of Chandra Shekhar Ghosh, Managing Director & Chief Executive Officer of the bank, for a period of three years, with effect from July 10, 2021.
Engineers India: The company reported lower consolidated profit at Rs 24.92 crore in Q4FY21 against Rs 119.68 crore in Q4FY20, revenue rose to Rs 1,131.9 crore from Rs 864.38 crore YoY.
Talbros Automotive Components: The company reported higher consolidated profit at Rs 27.43 crore in Q4FY21 against Rs 0.27 crore in Q4FY20, revenue jumped to Rs 157.63 crore from Rs 91.63 crore YoY.
Galaxy Surfactants: The company reported higher consolidated profit at Rs 78.68 crore in Q4FY21 against Rs 62.80 crore in Q4FY20, revenue jumped to Rs 783.52 crore from Rs 656.65 crore YoY.
Welspun Corp: The company received multiple orders of approximately 164 KMT valuing close to Rs 1,725 crore.
#WELCORP #GALAXYSURF #BANDHANBNK #TALBROAUTO #ENGINERSIN
#InvestmentIdeas
#TALBROAUTO
Not a 'buy' recommendation
*Talbros Automotive Ltd. | CMP Rs 143 (Mcap Rs 1.8bn)*
*Talbros – Small wonder*
We interacted with the management of Talbros Automotive Ltd to assess the current demand situation. Key segments include 2/3Ws (~36%), PVs (~28%), CVs (~18%) and Tractors (~11%). whereas its products encompass Gaskets (~49%), Forgings (~31%), Chassis components (~15%), Anti-vibration products & hoses (~5.7%). The company is a leader in automotive gaskets with ~48% market share whereas the balance is imported from other countries. Further, it supplies forging components (axles, transmission parts, exteriors) to OEMs like Maruti, JLR & Tata Motors. Backed by its own R&D team, it has indigenously developed heat shields (noise vibrators) where it is seeing good demand from JLR, Daimler, Tata and is in active discussions with OEMs like Hyundai and Kia for new orders.
*Facilities:* Gaskets – (Faridabad, Pune, Sitarganj), Forging (Bawal), Nippon Leakless Talbros Pvt Ltd. (Bawal, Haridwar), Magnetti Marelli (Faridabad, Manesar, Pune), Talbros Marugo Rubber (Manesar).
*Key customers (revenue includes JVs):* Talbros caters to a diversified customer base which include marquee OEMs such as Hero (~11%), Bajaj (~9%), BMW (~5%), Maruti Suzuki (~7%), JLR (~5%), GKN (~4%), Tata Cummins (~7%), Dana Italia (~3%), Tata Motors (~3%), HMSI (~3%).
*Demand outlook:* The company is seeing increasing orders from 2W OEMs including Bajaj (due to robust recovery in export markets) and Hero (recovery in entry level MC & foray into premium MC) for Gaskets and forging components, whereas volumes from HMSI is rather muted owing to slow demand for scooters. In PVs, it indicated that demand is seeing sustenance even beyond festive sales. The demand from farm segment is seeing fastest improvement. It is further witnessing increasing traction from Cummins where it has supplies ~9k units/month vs ~7k units on YoY basis). The content per vehicle for CVs is set to increase by 1.6x for VECV and 2.5x for Cummins and should see decent growth from Q4 onwards.
*Capacity utilization* for gaskets stands at ~85% (or Rs ~280mn/month), Forgings at ~75-80% (Rs ~180mn/month) while the utilisation at other JVs stands at ~75-80%.
*Exports (~22%)* are seeing strong recovery majorly due to new orders from BMW, JLR and Dana Europe. The company expects exports to ramp up to ~30% of its sales by FY25e.
*Outlook & Valuation:* Apart from legacy business of supplying gaskets, the company has forayed into newer product categories like sheet metals, forgings, heat shields, chassis systems, hoses and anti-vibration products. Talbros has grown its revenue/EBITDA has grown at 4%/1% over FY17-20. We believe, the company could outpace the industry growth at 1.5x on back of new product introductions, ramp up of key export markets and focus on new products like heat shields. *At CMP of Rs 143, the stock trades at 0.5x TTM sales*. With minimal capex of Rs 100-150mn, the company is well placed to generate superior free cash flows and improving return ratios over the medium term. The valuations should see support from robust traction in JVs with industry leading players like Magnetti Marelli (Forgings), Marugo Rubber etc.
Talbros Automotive Components is currently trading at Rs. 110.90, up by 10.70 points or 10.68% from its previous closing of Rs. 100.20 on the BSE.
The scrip opened at Rs. 108.95 and has touched a high and low of Rs. 110.90 and Rs. 107.00 respectively.
The BSE group 'B' stock of face value Rs. 10 has touched a 52 week high of Rs. 161.20 on 20-Jan-2020 and a 52 week low of Rs. 62.05 on 23-Mar-2020.
Last one week high and low of the scrip stood at Rs. 120.00 and Rs. 99.90 respectively. The current market cap of the company is Rs. 123.70 crore.
The promoters holding in the company stood at 58.16%, while Institutions and Non-Institutions held 1.49% and 40.35% respectively.
Talbros Automotive Components has received aggregate orders worth $31 million / Rs 234 crore including orders received in JV and subsidiary companies. These order span over a period of 5 years starting from H2FY21 and are expected to be completed by FY26. The company has enough capacities to cater to this order and will not be requiring any major investments to fulfil this order. This order will therefore provide operating leverage and will enhance the profitability of the company.
A major part of this order has been received from an International OEM based in India and will include domestic as well as exports orders. This order is in the Chassis JV. Other orders are across the Forging and Gaskets and Rubber JV of the company. These orders are catering to Domestic and International markets.
Talbros Automotive Components, the flagship manufacturing company of the Talbros Group was established in the year 1956 to manufacture Automotive & Industrial Gaskets in collaboration with Coopers Payen of UK. Today, Talbros stands proud and tall as a mother brand of gaskets, chassis, rubber products and forgings in India. Talbros Group portfolio also includes Mercedes Benz dealership for passenger cars.
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