Scripscan:Denso India Ltd
cmp:90
Code:520022
Story:DIL's product basket includes Alternators, Starter motors, and Wiper motors for passenger cars. It has a leadership status in alternators.Both Starter motors and Wiper motors are rapidly growing business segments. DIL offers CDI & Magnetos to the two-wheeler segment.The company is continuously developing products suiting forthcoming launches by OEM's.Leadership status in Indian Electric Automotive Component (EAC)Market.The electrical auto component business forms around 9% of the total size of auto ancillary industry of USD 10 bn. The key components in electrical parts are starter motors, generators, spark plugs, ignition coils, flywheel magnetos and voltage regulators. Denso with high percentage of its revenues coming from Capacitor Discharge Ignition (CDI) and Magneto would continue to remain a preferred supplier of ignition systems to most of the two-wheeler companies. Also it would not face any threat from the un-organized sector in a segment characterized by entry barriers like technical know-how and strong relationship with OEMs.The Company has made significant presence in PC's and Two-wheelers segment. It is preferred vendor to all the major OEM's in the Alternators, Starters,& Automotive Motors. It is the second largest player with market share of more than 30% in this segment of EAC's domestically. India being eyed as a global manufacturing hub for small cars -With almost all the major Passenger Car (PC) manufacturers have queued up to start production plants in India, Denso India Ltd. (DIL) with its inherent advantages like varied product profile & capacity to develop new products is set to benefit considerably.Opportunity is available from its parent in the form of outsourcing, due to cost advantage which Indian sibling has over other destinationslike Taiwan, Japan.Valuation wise too its trading at reasonable PE.Over the last few months denso had a dream run,It should consolidate before making its northwards move again.Members may recolect of having the recomendation of these company at sub 30 levels.The target has acheived and as of now make it investment free and hold the rest of the shares for the longer run.
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Saturday, October 3, 2009
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