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Topic: India Nippon electricals Limited

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jstk
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Joined: 14/Sep/2006
Location: India
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Topic: India Nippon electricals Limited
Posted: 14/Sep/2006 at 6:49pm

India Nippon Electrical [electrical components for the auto industry] provides an excellent investment option @ Rs.225.

It is a TVS group co with an equity of 8.08 cr .

TVS group through Lucas holds a 46% stake while co promoter kokusan denki of japan holding another 20%. Public holding is 26%.

The co has been a huge value creator with NP going up from 2 cr in 94 to 27.70 in 03. Last 3 yrs np has been 24.99 [ 04 ], 18.5 [ 05 ] & 20 [ 06 ].

The company holds 80 cr in MF investments / cash.

They have set up a facility at Pondicherry which chould reduce tax outgo.Exciting products in the digital electronis space are being developed.

06 dividend was 75%. They generally declare an interim sometime in dec.

Also TVSM- Apache doing very well is a big positive as it is one of its larger customers. INEL is also setting up an unit in Indonesia to cater to the TVSM plant there.

Most importantly the mgmt is superb. TK Balaji is one of the greatest visionaries of the auto ancilliary industry.

At a market cap of 180 cr, this stock is underpriced and can provide very handsome returns.

jayendra

If you buy for a non-value reason, you will end up selling for a non-value reason.

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tyler_durden
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Joined: 24/Oct/2006
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Posted: 05/Nov/2006 at 11:38am

am an engineer with maruti and nippon is one of our vendors. actually am currently in spare parts division and looking after pricing of accesories and spare parts.

maruti is the biggest customer of nippon. so if maruti goes from its customer list ,this company goes.

the way sony has been added to vendor list it surely has taken a lot from nippon(music systems). nippon is only providing security systems in a big manner now and its quite possible that it may lose its share there too.

and in terms of pricing power it can't do anything. maruti dictates terms.

in auto space i would suggest ASAHI is the best buy. i haven't seen any other glass company except asahi in maruti's warehouse.

lumax is another player which is leader, subros in AC space. but i would say lumax will grow handsomely.

be it maruti's warehouse or hyundai;s or tata's (my friends re working in hyundai and tata) lumax and asahi are the auto ancillaries which will grow the most.

Edited by tyler_durden - 05/Nov/2006 at 11:40am

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basant
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Location: India
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Posted: 06/Nov/2006 at 12:26pm

I would agree with you single dominant customers are always a threat. look at Munjal Shova inspite of being a promoter company this stock looks cheap and did look so some years back. These busineses are dependent upon the main company. So if some one buys Maruti instead of Nippon he would not do that badly. Aslo another company in the same league is Subros - supplies to Maruti.

Asahi is a good concept and could be bought by long term investors.

'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in

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jstk
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Joined: 14/Sep/2006
Location: India
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Posted: 06/Nov/2006 at 3:57pm

Agree with Tyler's analysis per se in terms of of dependence on a single customer.

This however does not apply in INEL's case ........i think he maybe sort of mixed it up with Nippon Audiotronics.

India Nippon Electricals is a JV between TVS Lucas & Kokusan Denski Co ltd japan and they are into electronic ingnition systems for 2 , 3 wheelers & portable engines.

Their client base includes every notworthy name in the above segment. They hardly cater to Maruti / 4 wheelers. They make flywheel magneto/CDI unit, ignition coil, rectifier unit & related goods.

TK Balaji , the company Chairman is a one in a million kind of a visionary.

The 2 wheeler space should see major launches in the coming few months and INEL is developing exiting new products in the electronic igintion space. Actually the last 2 yrs have been the worst for this company and even in these not so good days the co did an eps of around 24 and paid 8 rs dividend.

[INEL has compounded NP by 28% from 94 to 04 ]

I belive that TK Balaji will deliver over the next 2-3 yrs and steer the company again on the growth path.

jayendra

If you buy for a non-value reason, you will end up selling for a non-value reason.

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tyler_durden
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Joined: 24/Oct/2006
Location: India
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Posts: 1615

Posted: 06/Nov/2006 at 4:01pm

well jstk might be right the nippon that i was talkin about is in noida. kenwood music systems, speakers, car security systems re some of the major parts supplied by nippon to maruti.

i once spoke to the manager in nippon and he was worried about the healkth of parent company in japan.

i ll confirm it asap.

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gangadk
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Joined: 19/Mar/2010
Location: India
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Posts: 1

Posted: 19/Mar/2010 at 1:00am

I had Marathi Nippon security system installed in my Esteem car of 2007 model. Both the remotes were damaged. I would like to know where I can get the spares in Hyderabad

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shivkumar
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Joined: 02/Oct/2007
Location: India
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Posts: 2037

Posted: 19/Mar/2010 at 11:17am

Ask Bal Thackeray. His remotes are getting rusty these days!!!!!

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manish_okhade
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Joined: 20/Oct/2008
Location: India
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Posts: 1997

Posted: 21/Mar/2010 at 9:10pm

Originally posted by tyler_durden

am an engineer with maruti and nippon is one of our vendors. actually am currently in spare parts division and looking after pricing of accesories and spare parts.

Hi Tyler,

You are the guy i was searching for

Can you tell me the Auto landscape in recent time? I mean lots of foreign companies are enetering in India and many of them opening their own manufacturing in India (Chakan in Pune , Chennai etc). How do they procure their accessaries , from local vendors or simply imports them for quality reasons? If down the line they would be partnering with indiav vendor for their parts then future definitly augurs well. But i am afraid here because heavy import only manking the cars costly e.g Mercedese, VW, BMW etc. Let me know your opinion plz.

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