Originally posted by DFrancis .... 14. Finally, one question many retail investors want to know. Why is Suprajit in “T” group? What exactly happened?? Can the company do something about restoring status ante? How does the Management view this relegation? Has it taken any steps to reassure Investor groups, Institutional Investors? Usually stocks when relegated to T group have suffered in performance – Is there a material impact on Suprajit shares performance?

Company can't do anything. If exchanges feel unsure about the reason behind sudden price/volume movements, stock is put in T2T. Generally, not reflection on company fundamentals.

Sorry..I have been travelling and havent followed up. I did have a meeting with the Company Secy who discussed operational aspects freely.

For more strategic answers I requested a followup meeting with MD which he said will try to facilitate...hasn't happened on its own and I haven't been able to followup. Will do in a few weeks!

Donald

Edited by basant - 07/Aug/2010 at 1:51pm

Conference Call      
          Suprajit Engineering
Has become preferred supplier for John Deere in U.S.


Suprajit Engineering (Suprajit) held conference call on 5th Aug 2011 to discuss its performance for the quarter ended June 2011 and its future prospects. The meeting was presided over by Mr. Ajith Kumar Rai -Managing Director and Mr. Medappa Gowda – Chief Financial Officer

Key Highlights from the Discussion
It expects growth of around 60% in aftermarket sales and 30-40% in non auto exports for FY 2012.
The company has become the new preferred supplier for John Deere. It supplies to half the plants of John Deere in U.S. and is receiving enquiries from John Deere European plants now.
Currently undergoing expansion plan at various plants. The cable capacity would be expanded to 150 million cables by September 2012. It includes a new plant at Bangalore which would commence operations in April 2012.
It expects the auto exports to improve in H2 FY 2012 backed by new orders on hand. As of now, the auto exports are stagnant.
Future focus of the company is on non auto and aftermarket. In FY 2011, the share of aftermarket in total sales was 7% and of non auto exports were 5%.
The company has 225 distributors across India. It has also has distributors in Sri Lanka, Bangladesh and Nepal.
Sold 31 million cables in June 2011 quarter from 26 million cables in June 2010 quarter.
Top five customers constitute 60-65% of its sales. They are Bajaj Auto, TVS Motor, Hero Honda, General Motors and Suzuki. It has marketshare of 70% in two wheelers.
It caters to Maruti indirectly through other Tier 2 suppliers.
Its global business caters 95% to auto.
Its global business constitute 15% of its consolidated revenue.
The cable realizations from car manufacturers is double than from two wheelers.
Capacity utilization was 90-95% in FY 11.
Share of requirement met by the company in various two wheelers are 70% in Hero Honda, 90% in Bajaj Auto and 100% in TVS Motor.

Originally posted by Chillman  Hi everybody. I am studying Suprajit very closely since last month. The stock has made a very decent breakout technically and looks a very compelling buy in the 115-125 range.    The fundamentals of the company are also very excellent. Here are a few of them (in addition to the earlier brief):    1. Based on the YoY  %age sales growth of the last 10 years, the long term sales growth comes to 25.30%.     2. The operating profit margin for the pat 10 years has hovered in the range of 15 - 17% which is pretty consistent. Remember that auto ancillaries being vendors  can remain competitive by improving the costing and quality as they don't have much bargaining power. Any rise in the inputs have to be met internally either by cost cutting or reducing margin and hence profitability at the operating level assumes significance    3.  Inventory levels of auto ancillaries is a very important indicator. For Suprajit the inventory days as per Mar'09 bal sheet is 23 days. The average based on 10 year data was 20 days. However the latest peer comparison (Bosch, Motherson Sumi, Exide and Amtek auto) reveal that the average inventory holding stands at around 38-40 days.     4. Majority of the brokerage houses are very bullish on the Auto sector for the coming year.     5. The company's clients include heavy weights of the auto sector and it is a tier I supplier for many of them.     6. Prices of steel , rubber to be kept an eye on since they are the major inputs.     7. Being in the capital intensive business , the asset turnover ratio and ROA play an important role. For suprajit, the latest annual  total Assets t/o ratio  is 1.71 times. The average for an auto ancillary is somewhere around 2 to 3 times.   The ave. ROA for Suprajit for last 10 yrs was 13.74% whereas the latest was 11.03%. So Suprajit is slightly lacking on the asset utilisation front.     8. The company is also lacking on the Wcap to Sales ratio where the latest is Sales are  10 times the Wcap. The peers have somewhere around 15- 27 times.     On charts the company looks a strong buy, the last 7 trading sessions have been phenomenal with good volumes and the stock has zoomed from Rs.95- 98 to Rs.118. It is hittin new highs almost everyday.     However the positives of the company outweigh the negatives and hence one can consider this scrip for the long term.      One can check BSE/NSE website for Suprajit's management's letter to the shareholders on the progress of the company submitted to the exchanges.    Good day.

Dear Chillman,
You have mentioned W cap to sales ratio of the company is 10 as compared to peers whose ratio is 15-27. I think lower the ratio better for the company. But your concern doesn't seem so. Can you explain me the logic of higher the ratio better for the company?