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TRANSCRIPT
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Ideas 20-20 Conference
Naresh Kumar Katariya27th August 2016
Ideas 20-20: Naresh Kumar Katariya
+ Investment Strategy: G-O-V Model2
Ideas 20-20: Naresh Kumar Katariya
+ Investment Strategy: G-O-V3
Deep Insight of Industry/Company, to enable:• Right Position Sizing• Realizing the full potential
Deep Insight of Industry/Company, to enable:• Right Position Sizing• Realizing the full potential
Ideas 20-20: Naresh Kumar Katariya
+ Tell Me Where I am Going to Die, So I Won’t GoThere – Charlie Munger
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Key variables to watch out for and avoid:
High Receivable Days
Low Dividend Payout Ratio
High Valuations
Lack of Free Cash Flow
Key variables to watch out for and avoid:
High Receivable Days
Low Dividend Payout Ratio
High Valuations
Lack of Free Cash Flow
Ideas 20-20: Naresh Kumar Katariya
+ Investment Idea: Lumax Auto Technologies5
The investment idea is more to explain myinvestment strategy, rather than a stockrecommendation
Ideas 20-20: Naresh Kumar Katariya
+ Car Penetration levels in India set to grow6
Ideas 20-20: Naresh Kumar Katariya
+ Automatic Car Penetration in India is far belowglobal levels
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Ideas 20-20: Naresh Kumar Katariya
+ Demand for Automatic Transmission ispicking up
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Ideas 20-20: Naresh Kumar Katariya
+ Lumax Auto Technologies9
• Lighting• Two-wheeler Frames• Moulded Parts
• Lighting• Two-wheeler Frames• Moulded Parts
Lumax Mannoh(55%)
• AutomaticTransmission
• 70.3 Cr
Lumax Mannoh(55%)
• AutomaticTransmission
• 70.3 Cr
Lumax Cornaglia(50%)
• EmissionSystems
• 38 Cr
Lumax Cornaglia(50%)
• EmissionSystems
• 38 Cr
Lumax Gill-Austem(50%)
• SeatingSystems
Lumax Gill-Austem(50%)
• SeatingSystems
Lumax Sipal(51%)
• DefenseLogisticsSupport
Lumax Sipal(51%)
• DefenseLogisticsSupport
Ideas 20-20: Naresh Kumar Katariya
+Investment Highlights
Operating Leverage: Working at less than 75% CapacityUtilization.
Major investments completed. Fixed Assets from 211 Cr(FY13) to 332 Cr (FY16). No major capex for FY17 and FY18.
25% of sales from Aftermarket. Expected to grow due toongoing focus.
Lumax Mannoh is sole supplier of Automatic Transmissionsystems to Toyota Innova Crysta, Maruti Baleno.
Lumax Cornaglia benefits from move to Euro-VI Emissionnorms
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Operating Leverage: Working at less than 75% CapacityUtilization.
Major investments completed. Fixed Assets from 211 Cr(FY13) to 332 Cr (FY16). No major capex for FY17 and FY18.
25% of sales from Aftermarket. Expected to grow due toongoing focus.
Lumax Mannoh is sole supplier of Automatic Transmissionsystems to Toyota Innova Crysta, Maruti Baleno.
Lumax Cornaglia benefits from move to Euro-VI Emissionnorms
Ideas 20-20: Naresh Kumar Katariya
+Financial Summary: Lumax Auto Tech
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FY16 FY15 FY14 FY13 FY12 FY11 FY10 FY09
Sales (Cr)905.15 837.17 762.76 766.30 751.48 626.69 416.92 296.30
EBIDTA % 7.55% 7.98% 7.92% 8.75% 8.72% 9.23% 8.57% 7.64%
20.86 19.36 17.60 10.83 7.98 7.00 6.00 4.33
17.3% CAGR17.3% CAGR
Depreciation (Cr)20.86 19.36 17.60 10.83 7.98 7.00 6.00 4.33
Consol PAT (Cr) 31.77 30.20 30.23 41.05 50.73 43.68 22.92 11.39
Div. Payout (%)20.16% 31.59% 27.05% 19.92% 16.12% 18.72% 17.84% 11.97%
RoE % 11.97% 12.56% 13.83% 20.83% 31.28% 39.15% 31.51% 19.23%
Working Cap Days 9.28 8.98 -1.89 5.38 8.65 3.37 -0.74 7.49
Ideas 20-20: Naresh Kumar Katariya
+Points of Caution/Consideration
Current valuations not very compelling: 12x ofFY17E
Customer Concentration: Bajaj contributes over25% of sales
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Current valuations not very compelling: 12x ofFY17E
Customer Concentration: Bajaj contributes over25% of sales
Ideas 20-20: Naresh Kumar Katariya
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Q n A
Ideas 20-20: Naresh Kumar Katariya
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Thank You
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Thank You
Ideas 20-20: Naresh Kumar Katariya
+About Speaker: Naresh Kumar Katariya
Passionate value investor, combining traditionalinvesting approach with Business analytics andSentiment analysis
Engineer with specialization/certification in RiskManagement
Earlier career in Consulting in Risk and Compliancewith global experience covering over a dozen marketsworldwide.
Reachable at Twitter @KhivrajNaresh &www.moneycurves.blogspot.in
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Passionate value investor, combining traditionalinvesting approach with Business analytics andSentiment analysis
Engineer with specialization/certification in RiskManagement
Earlier career in Consulting in Risk and Compliancewith global experience covering over a dozen marketsworldwide.
Reachable at Twitter @KhivrajNaresh &www.moneycurves.blogspot.in
Ideas 20-20: Naresh Kumar Katariya