Independent Research Analyst

Mamta Verma

DC India Research

DC India Research LLP (DCIR) is based out of Mumbai, India.

We specialize in providing customized, independent research across listed and unlisted companies in India across equities and credit including sectoral research. Our customers include India focussed PE funds, special situation funds, domestic AMCs, Wealth Advisory& PMS firms, Rating Agencies & Investment Advisors. 

The DCIR board consists of prominent names from the industry as well as CIO’s of Hedge funds.

Equity Bottom-Up

Lumax Auto Technologies / Equity Bottom-Up

In this note, we share data on key financial metrics on some top investment stock opportunities that came up post q1-FY19 earnings season analysis.  These are businesses which are witnessing either or/and -1. Strong topline visibility driven by favourable sectoral demand, premiumisation of revenue mix, new order wins2. Benefits of operating leverage with capacity ramp-up, company-specific situations of cost optimisation/premiumisation driving gross profit margins - all driving core EBITDA margin improvement3. Balance sheet deleveraging in certain cases which helps to reduce interest expenses4. Some opportunities with in the SMID space where there is negligible street coverage and hence mispriced opportunity Our Top Recommendations in the SMID space are -1. Lumax Auto Tech2. RICO Auto3. Lux Industries4. Dollar Industries5. HIL Limited6. Balkrishna Industries

In this note, we share data on key financial metrics on some top investment stock opportunities that came up post q1-FY19 earnings season analysis.  These are businesses which are witnessing either or/and -1. Strong topline visibility driven by favourable sectoral demand, premiumisation of revenue mix, new order wins2. Benefits of operating leverage with capacity ramp-up, company-specific situations of cost optimisation/premiumisation driving gross profit margins - all driving core EBITDA margin improvement3. Balance sheet deleveraging in certain cases which helps to reduce interest expenses4. Some opportunities with in the SMID space where there is negligible street coverage and hence mispriced opportunity Our Top Recommendations in the SMID space are -1. Lumax Auto Tech2. RICO Auto3. Lux Industries4. Dollar Industries5. HIL Limited6. Balkrishna Industries

Interesting Ideas in the SMID Space Post Q1-FY19 Earnings Season

Equity Analyst, LightStream Research

Aqila Ali

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Samvardhana Motherson International Ltd / Equity Bottom-Up

We had previously mentioned that <a href="https://www.smartkarma.com/entities/10662" target="_blank" data-smartkarma-citation="entities:10662:1">Motherson Sumi Systems Ltd (MSS IN)</a> is on the lookout for further acquisitions, and that the company expects inorganic growth to account for at least 35% of its total FY2020E revenue target.  We also mentioned that, after PKC, the company is considering almost 30 deals, out of which four looked promising to them. On December 18th, 2017, Motherson stated on a report to Economic Times India that it is to announce two new acquisitions soon.  As such, we have been working on this insight, which details the potential acquisition targets for Motherson.  <blockquote>“I am going to give the go-ahead for two new acquisitions. We have a list of companies and have hired one of the big four consultancies to help us. We have finalised an agreement with one of the target companies,” said Mr. Seghal. </blockquote>The company also stated to the Nikkei that significant opportunities lie in the US and Europe while acquiring a Japanese company is almost impossible due to their highly competitive nature. Furthermore, Motherson has acquired 19 companies since 2002, most of them being in the US and Europe. These acquisitions also include a decent number of private companies acquired mostly via asset purchase.  Thus, we have put forward our list based on these factors, including some large companies and a few small companies. However, as mentioned it should be noted that the company may also acquire private companies who might prove to be key growth drivers for their business.  Moreover, we also looked into product mix (making sure the companies selected had a presence in the automotive and industrial markets) and geographical coverage. We also carried out an analysis on the financial benefits that may accrue to Motherson if they go ahead with acquiring either of the listed companies. When combined, certain acquisitions brought down Mothersons’ profitability as these companies’ margins were lower when compared to others. However, we believe that Motherson can still go about turning around these companies’ performance post-acquisition as it has done in the past.

We had previously mentioned that Motherson Sumi Systems Ltd (MSS IN) is on the lookout for further acquisitions, and that the company expects inorganic growth to account for at least 35% of its total FY2020E revenue target.  We also mentioned that, after PKC, the company is considering almost 30 deals, out of which four looked promising to them. On December 18th, 2017, Motherson stated on a report to Economic Times India that it is to announce two new acquisitions soon.  As such, we have been working on this insight, which details the potential acquisition targets for Motherson.  “I am going to give the go-ahead for two new acquisitions. We have a list of companies and have hired one of the big four consultancies to help us. We have finalised an agreement with one of the target companies,” said Mr. Seghal. The company also stated to the Nikkei that significant opportunities lie in the US and Europe while acquiring a Japanese company is almost impossible due to their highly competitive nature. Furthermore, Motherson has acquired 19 companies since 2002, most of them being in the US and Europe. These acquisitions also include a decent number of private companies acquired mostly via asset purchase.  Thus, we have put forward our list based on these factors, including some large companies and a few small companies. However, as mentioned it should be noted that the company may also acquire private companies who might prove to be key growth drivers for their business.  Moreover, we also looked into product mix (making sure the companies selected had a presence in the automotive and industrial markets) and geographical coverage. We also carried out an analysis on the financial benefits that may accrue to Motherson if they go ahead with acquiring either of the listed companies. When combined, certain acquisitions brought down Mothersons’ profitability as these companies’ margins were lower when compared to others. However, we believe that Motherson can still go about turning around these companies’ performance post-acquisition as it has done in the past.

Two More Acquisitions on the Way for Motherson Sumi

India

Lumax Auto Technologies Limited manufactures a wide range of automotive components. The Company's products include drive transmission and steering components, body and chassis, and electrical components.

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Lumax Auto Technologies (LMAX IN)

Interesting Ideas in the SMID Space Post Q1-FY19 Earnings Season

In this note, we share data on key financial metrics on some top investment stock opportunities that came up post q1-FY19 earnings season...

DC India Research

Two More Acquisitions on the Way for Motherson Sumi

We had previously mentioned that Motherson Sumi Systems Ltd (MSS IN) is on the lookout for further acquisitions, and that the company expects...

Aqila Ali

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