PPAP Automotive Ltd | Auto Ancillaries Sector | 2019 Multibagger shares to invest in Indian Stock Market ~ Earning Folio Research & Investments

Looking for a long term small cap value pick in Auto ancillary sector? PPAP India is one of the small company in this sector which is performing very well. Another good company in Auto ancillary sector analyzed by us is Wabco India Ltd, check it out. Looking for more value companies, please see top 5 Indian shares to invest now!!

Here is a detailed analysis of Wabco India Ltd. You can read more below:

About the company

BSE: 532934

NSE: PPAP
ISIN: INE095I01015
SECTOR: Auto Ancillaries

PPAP Automotive Limited manufactures automotive sealing systems, and interior and exterior automotive parts in India. The Company offers polymer extrusion-based automotive sealing system and injection-molded products. It has injection molding machines, ranging from 60 tons to 2500 tons. The Company's manufacturing facilities are located in Noida (Uttar Pradesh), Greater Noida (Uttar Pradesh), Chennai (Tamil Nadu) and Pathredi (Rajasthan).

Major products

The Company's automotive sealing system product range includes outer belt molding (black type/bright type), inner belt molding, windshield molding, roof molding, quarter window molding, air spoiler, a-pillar garnish, b-pillar garnish, bodyside protector, skirt air damper and slide rail system. The Company also manufactures interior and exterior Injection molded products, such as door trims, interior pillars, rear parcel shelf, trunk linings, and fender Inner.

Client Engagements

PPAP was started with the production of Maruti and Maruti Suzuki India Limited remains its major client. Other clients are Hyundai Motors India Limited, Ford India Limited, Tata Motors Limited, Mahindra and Mahindra Limited, Honda Cars India Limited, Renault Nissan, and many more.

Positive indicators

The company's automotive products were used in 72% of total passenger vehicles (PV) produced at 8.87 lacs in India in Q3FY18-19.
Maruti Suzuki accounts for 49% of its sales.
Honda accounts for 28% of the company's topline growth.
98% of sales from Passenger Vehicle.

Opportunities

With the growth of the Indian middle class, the passenger vehicle market is bound to show boom.
Growth in the auto industry will increase demand for sealing products.
No matter what kind of changes comes to core Auto technologies, the sealant product will be in demand.

Risk

Its business is tied with Maruti-Suzuki business as Maruti Suzuki is the largest client of the company. The company should diversify its business.
It is a very small company and it is important to keep a watch on the management decision on how they expand the business.

The expected range of price

Share bought around INR 220-230 in Q3 2018-2019 should be around INR 450-550 in next 18-24 months.

Disclaimer: This is not an advice or recommendation to buy the stock. The illustration is for educational purpose only. Please check with your investment advisor before investing. Please read the detailed disclaimer below.

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