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Old 17th March 2018, 22:26   #226
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Default Re: Guide: Investing in shares of the automotive sector

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Originally Posted by whitewing View Post
There is an upcoming IPO of an automobile OEM called "SANDHAR TECHNOLOGIES" opening on March 19th. Any views on this?
The company has a P/E of 43 at the upper band but has total borrowings of close to 5100millon and expects to retire 2750million with the IPO proceeds.
Rs. 510 cr debt means approx Rs. 51 cr in interest payments. If it retires Rs. 275 cr debt, it means approx Rs. 27 cr goes straight into bottomline. You should adjust PE accordingly.

Meanwhile, HAL's IPO seems to be very well priced.
https://www.moneycontrol.com/news/bu...t-2529703.html

- Orderbook of Rs. 68,000 cr
- 7% of sales spent on R&D
- Favorable Govt policy (Make in India)
- No debt
- RoE of 22%
- asking price is 16 times FY17 earnings
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Old 10th April 2018, 12:32   #227
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Default Re: Amtek Auto

Do you expect a Mahindra-Satyam kind of revival with Liberty-Amtek or is it likely to fizzle out? The share was on UC for a couple of days after announcing the buy-out by Liberty, but then this UCs are not seen today.
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Old 10th April 2018, 14:01   #228
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Default Re: Amtek Auto

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Originally Posted by skumare View Post
Do you expect a Mahindra-Satyam kind of revival with Liberty-Amtek or is it likely to fizzle out? The share was on UC for a couple of days after announcing the buy-out by Liberty, but then this UCs are not seen today.
Mahindra acquired Satyam company, and hence the stock price rose from Rs. 6 to Rs. 60 or so.

But in Liberty Amtek case, Liberty is buying assets of Amtek. The cash from proceeds of asset sale goes to Amtek's lenders (banks) - since they have higher rights than equity shareholders. If something is left over after clearing Amtek's dues, then the remain cash accrues to the shareholders.

So what's happening to Amtek's stock price is just speculation right now.
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Old 10th April 2018, 14:39   #229
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Default Re: Amtek Auto

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Originally Posted by smartcat View Post
But in Liberty Amtek case, Liberty is buying assets of Amtek. The cash from proceeds of asset sale goes to Amtek's lenders (banks) - since they have higher rights than equity shareholders. If something is left over after clearing Amtek's dues, then the remain cash accrues to the shareholders.

So what's happening to Amtek's stock price is just speculation right now.
I am reading a bit on Amtek and understand LH is buying the company and not the assets. But, I have to admit, I am a novice in this area.

While I am not looking for cash accrual for share holders immediately, I am more interested in opinions regarding whether LH will be able to turn around the company in medium/long term? Will the current share holders benefit in the long term in case the company is turned around in future?

Source 1 - livemint
Source 2 - Liberty House

Last edited by skumare : 10th April 2018 at 14:42. Reason: Typo
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Old 10th April 2018, 14:48   #230
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Default Re: Amtek Auto

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Originally Posted by skumare View Post
I am reading a bit on Amtek and understand LH is buying the company and not the assets. But, I have to admit, I am a novice in this area.
Nope. Check the word in bold from Liberty House link you sent -

Quote:
Liberty House, part of Sanjeev Gupta's global industrial group GFG Alliance, is set to make a dramatic entry into India after being chosen as preferred H1 bidder for Amtek Auto Pvt Ltd assets which include 35 automotive component plants across India, Japan, Thailand and Spain, employing some 6,000 people.
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Old 16th April 2018, 17:48   #231
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Default Re: Guide: Investing in shares of the automotive sector

A detailed analysis from ICICI Securities on Maruti isn't optimistic about the share price:
Guide: Investing in shares of the automotive sector-msil_update_apr18page001.jpg

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Guide: Investing in shares of the automotive sector-msil_update_apr18page015.jpg
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Old 3rd May 2018, 15:49   #232
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Default Re: Guide: Investing in shares of the automotive sector

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Originally Posted by smartcat View Post
Always look at consolidated numbers while evaluating a company.
Is this because the shares bought for a particular company implicitly apply to its subsidiaries as well and only a consolidated view will reflect the financials as a whole? Or is there more to it?
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Old 3rd May 2018, 20:25   #233
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Default Re: Guide: Investing in shares of the automotive sector

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Is this because the shares bought for a particular company implicitly apply to its subsidiaries as well and only a consolidated view will reflect the financials as a whole? Or is there more to it?
Yes, if subsidiary starts losing money, it affects the shareholder of the parent company too. Let's say company X owns 60% of company Y. If company Y makes a loss of Rs. 100 crores, then company X needs to add the loss of Rs. 60 crores to their P&L - since they own 60% of the shares.

In Tata Motors case, while the parent is losing money, JLR subsidiary is making tons of it. If you just look at standalone numbers, it gives a wrong impression about Tata Motors.

Last edited by SmartCat : 3rd May 2018 at 20:32.
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Old 5th May 2018, 09:07   #234
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Default Re: Guide: Investing in shares of the automotive sector

Smartcat,

What are your views on Tata Motors as a investment candidate. The stock is close to 52 wk lows. There are positive reviews of their new vehicles in this forum. People owning Tiago also have given a positive feedback. With JLR doing good and with foray into EV space, should this not be a good candidate for a long term investor and available at reasonable valuations.
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Old 5th May 2018, 10:37   #235
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Default Re: Guide: Investing in shares of the automotive sector

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Originally Posted by biju1971 View Post
What are your views on Tata Motors as a investment candidate. The stock is close to 52 wk lows. There are positive reviews of their new vehicles in this forum. People owning Tiago also have given a positive feedback. With JLR doing good and with foray into EV space, should this not be a good candidate for a long term investor and available at reasonable valuations.
Very reasonable valuations. But I'm not sure why Tata Motors stock is trending downwards and now at 52 week lows.

Perhaps we should compare it with BMW/Daimler/VW (which are trading at similar valuations) instead of Maruti. Like Tata Motors, the stock of BMW, VW & Daimler too has not done much in the past 5 years. After all, Tata Motors Indian business during good times had profits in the range of Rs. 1,000 cr to Rs. 2,000 cr while JLR has been consistently logging Rs. 10,000 cr to Rs. 15,000 cr in profits. That is, even if India business gets back on its feet, it will still be a small percentage of JLR business in terms of revenues and profits.

The reason why Maruti is trading at 30 to 40 times PE is because there is strong visibility in earnings over the next 10 years, and that the markets are willing to pay a premium for that. With JLR (along with BMW, Daimer & VW), there is no such long term visibility in earnings and growth.
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Old 5th May 2018, 23:33   #236
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Default Re: Guide: Investing in shares of the automotive sector

On screener.in is the EPS in the Annual Results section the final dividend one gets per share? If yes then it is the amount after the company deducts DDT and cess.

If I see dividend amount on any of the websites is it safe to assume it is after all deductions (tax) ?

Also what does the "unadj" in brackets next to EPS mean?
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Old 7th May 2018, 10:16   #237
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Default Field report from investing for a month

An year ago I was seriously considering a plunge into equity investment. Back then I called it the stock market.. everyone was doing it and I too wanted a part of the action.. I stared reading lots of online articles and just as I concluded that investing in the auto sector was The thing for me I came across the post from smartcat and thus started my investment journey..

The reason I stick to auto sector is simple. I have been in the industry for a decade and investing will help me look at the companies my company deals with in a different light.. I was also hopeful of insider info on tipping the scales in my favor..(I now realize how much deluded I was)

Now, before starting I would like to share one piece of gyaan. Before anyone invest in trades, take a look at the Bloomberg terminal.. thatís how the pros trade and thatís where most of the profits are made.. based on this the targets can be set ..

So, I stared in June with an account in zerodha when I had a week off from office.. after a
Lot of analysis I realized that most companies in auto sector have grown leaps and bounds over past 2-3 years and am staring at really high pe ratios.. i posted about this in this forum. Got some clues.. I blindly took the plunge into endurance tech as it was figured in the cover story of autocar professional..

I then defined my stategy of investment.. 1000 a month for an year.. nothing more nothing less..

I have made my investments in 8 auto companies for a total of 12000.. I am at a loss of 500 RS mainly.. If you are new to stocks I suggest you to follow the same strategy. The loss of 500 was my making which I will detail in a separate post.. my plan was to learn and boy has it been an eventful and fun-filled year..

I will detail my investments and my next steps in the coming post.
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Old 7th May 2018, 15:13   #238
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Default Re: Guide: Investing in shares of the automotive sector

I got the share of endurance at 900 levels and it’s now at 1200. A good bet, but the return in the early days were even better..

But I saw real money can only be made by going against the trends.. I need to buy low first .. I came across amtek trading at 30 and put in 1000 RS. It went South but I held on.. there were two occasions when the stock hit the upper circuit and I was amazed.. 20 +% swing in a day.. I have increased my exposure and am holding stocks Worth 4000 with a loss of 1000 now.. this stock has wiped out my gains but am too invested to back out.. started buying at 30.. now it’s trading at the 13 range.. I hope to see it surge like spice jet someday..

I now have stocks Worth 11000 in mothersin, sonakoyo, Tata motors, endurance, greaves cotton..nrb, precam, ucal fuel.. I have setco and Rico in my watch list..
In Jan, during the pongal break . I tried my hands in day trading.. The concept of Margin is taking trading to the next level. It’s perhaps the easiest form of credit available even for those who don’t need it(me). I took the time during my pongal break at which time the market was at a all time high and started betting.. poorly planned stop loss made me look like a fool and I lost a massive 1000 in a day.. I made a profit of 200 in the next day by factoring in global market sentiment during start of trade. Margin trading is fun.. it’s intense.. you need the terminal to execute and this is a whole new world altogether…

As this business affects my day job adversely I am not doing it now. It’s not the time but the mental space which occupies day trading that made me back off..
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Old 21st June 2018, 10:24   #239
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Default Re: Guide: Investing in shares of the automotive sector

Hi Smartcat


Any inputs from your side on this upcoming IPO of Varroc Engineering?


https://www.business-standard.com/ar...1900731_1.html

They claim to be the No.1 in Two wheeler Automotive Segment in India catering to Harley Davidson, KTM, Bajaj, Honda
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Old 21st June 2018, 11:48   #240
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Default Re: Guide: Investing in shares of the automotive sector

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Hi Smartcat Any inputs from your side on this upcoming IPO of Varroc Engineering? They claim to be the No.1 in Two wheeler Automotive Segment in India catering to Harley Davidson, KTM, Bajaj, Honda
To invest in a stock, I need 3 or 5 year sales data, balance sheet and annual reports. I especially need data on how much dividends they pay out of their profits. Since this data is not available for IPOs, I avoid them.
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