Powertrain vertical (Cylinder Heads is part of this segment) - 52% of total revenue
Leading player for:
- CV (#1 position) - 54% revenue
- Off highway - 20% revenue
- Tractors (among top 3-4 outsourced players) - 18% revenue
Whereas, PV is only 8% only
2/n
Within Powertrain vertical, Cylinder heads & cylinder blocks make up the major chunk at 60% revenue
3/n
Cylinder Head:
SUV (PV) forms the biggest pie of the TAM in this product category where Craftsman didn't have any material presence as seen earlier.
4/n
Powertrain vertical particularly the cylinder block and cylinder heads are relatively high value & high margin products for Craftsman vis-à-vis transmission products due to the complexity involved in machining these products.
5/n
With that background lets look at Dr. Axion India business.
Incorporated in Dec 2006, it mfg. Cylinder heads for PV & CV
Its operations are supported by the South Korean R&D driven Parent co. DR Axion, who provides technical and operational expertise.
Strong Financials
6/n
The co. employs state of the art, automated production lines used by the parent.
Only 1 Mfg. plant - Chennai
Key customers:
PV:
- Hyundai Motor India Limited (HMIL) - 48% of total sales
- Kia Motors India Private Limited (KMIP)
CV:
Mahindra Heavy Engines Limited (MHEL)
7/n
Interestingly, its the sole supplier of Cylinder Head to both Hyundai & Kia in India (Almost 100%)
PV Market share based on total cars manufactured in India data.
- Hyundai - Top 3
- Kia - Gaining MS - Top 5
9/n
Facilitating M&M’s transition to aluminium engines
10/n
Financials:
- Sales volume grew by 39.0% YoY in 9M FY2022
- Sales growth at 49% CAGR FY19-22
- Synergies with Craftsman operations could potentially take the margins higher from here.
11/n
Powertrain segment revenue share could potentially look drastically different with almost 700 Cr. getting added to PV segment with this acquisition, moving from 8% -> almost 40%
12/n
Craftsman mgt. guided for 20-25% CAGR growth for the next 3-4 years. This acquisition pushes it further up and opens its doors to Top PV OEMs and
13/n
14/n
Acquisition is expected to be completed before 31st March, 2023.
#EMS market is set to grow at +30% CAGR for at least next 5 years from ₹1,469Bn to ₹6,000Bn by FY27.
🧵 on some spl. business insights from Q3FY23 concall & other sources
@soicfinance @ishmohit1
1 can't miss this decadal opp.
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There are 2 models that business generally follow:
1. Low Value High Mix (LVHM) - eg. consumer 2. High Value Low Mix (HVLM) - eg. Industrial
This data suggests both type of businesses are set for long-term high growth.
This is a crowded space with Indian and large MNC players. However, the industry as a whole is set to grow exponentially and established players who can achieve scale & offer wider capabilities stand to win bigger + mgt. are saying they are just scratching the surface ryt now.
Interesting development: Partnered with #Foxconn in 2W EV
- Foxconn is a large key component supplier to many OEMs globally
- Focus is mass production
- Achieve economies of scale = cheaper production cost per unit
- Fully integrated solutions
So why is this imp ?🧵
1/10
2/
2021 news - Foxconn aims to build EV factories in Europe and India by 2024. Not sure if there has been any developments on ground but it gives an indication towards their ambition
Longtime iPhone assembler Foxconn has been stepping up efforts to expand its presence in the booming EV industry since its new chairman assumed position in mid 2019.
Their chairman was in India last year discussing opportunity in India.
- Business overview
- Financials
- Valuations
- 1 year Concall highlights (Q1 FY22 to Q1FY23)
Took long to compile this
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For wider reach
@soicfinance @itsTarH @Shubham_TLI @ValueEducator @Gautam__Baid
1/14
2/ Co. overview
3/ Segments:
APIs & Intermediates for innovators & generic firms for a variety of applications like anti-cancer, anti-asthmatic, antihypertensive, oncology medicines.
Xanthine derivatives are used for beverages, as well as nutraceutical and other pharma applications.
But when your mentor asks you to read a business you oblige. Thanks @ishmohit1, please add your insights if you find any gaps.
#Taskus 🇺🇸 $TASK
"Outsourcing reimagined for the innovation age"
🔥60% Revenue CAGR over past 4 years
2/ Background: Founded in 2008 during recession by 2 high school best friends, Jasper Weir & Bryce Maddock
3/ While all major competitors in the industry were occupied serving traditional telco clients, they focused efforts on the emerging digital economy. Most clients have 3 things in common: they are truly customer obsessed, they've grown faster than nearly every other company
2/ About the co. - Great export biz - almost 50% Revenue from sales in 60+ countries (Exports). No client concentration risk with top 10 making 23% sales only.
3/ Leading forward integrated domestic producer of Synthetic pyrethroids & has has presence across its value chain (intermediates, technicals & formulations).