Talbros Automotive Components Ltd – A Hidden Gem or Just Another Ancillary?

“Boards are the custodians of corporate conscience and long-term value.”
— Lucy P. Marcus

Focus On Management

Board of Directors

Compliance angle

Company has held analyst / Investor calls on a quarterly basis since past 5 years without any discrepancies

Key Financials

• Management has guided to keep Net debt level below 100cr by FY27

Cash flow

Capex Snapshot

• Guided for total capex of 205cr for next 3-4 years mainly funded by internal accruals,

*Source for above Financial data is submissions made by company to Stock Exchanges*

Focus area going forward

• Increase the share of exports in revenue from 25% to 35% by FY27.
• Increase in share of EV related components from 2% to 12% by FY27.
• Double annual revenue to 2200cr by FY27 backed by EV components and Exports.

Dividend payouts ( Face Value 2)

Order book snippet

Promoters skin the game

Key Takeaways

• The overall industry growth for Forgings, Gaskets & Heat shields is expected to be 9,8%, 7% & 7.4 percent respectively on a CAGR basis.
• Company’s focus on these areas is a positive.
• While overall revenue has almost doubled from FY21 to FY25, company has faced challenges in recent years due to Supply chain issues, Increased expenses and overall Industry competition.
• As a result of slow growth in revenues & profits the dividend payouts are significantly lower in the recent two financial years.
• Also, the evolving situation around bankruptcy proceedings of Marelli will need to be looked at closely as it has a JV with Talbros.
• On the other hand strong order book and recent orders from new clients like Tata motors puts the company on a good note to achieve their guided numbers.
• Available at a market cap of 1793 crores with a PE of 19.

While there are challenges considering the entire geo political and tariff situation but, the valuation, debt levels and governance metrics provide the cushion on which one can take a bet on this company.

PS: Please contact your financial / investment advisor before taking any decision.

Good corporate governance may not necessarily translate into good investment returns but it surely ensures safety of capital and peace of mind to a decent extent

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