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5 Japanese Backed Companies in India

07 Aug 2019 Nikita Bhoota

Untitled Document

India and Japan have deepened their strategic ties over the years. In recent developments, the two countries have signed 15 MoUs, which includes the flagship bullet train project. Talking about the recent bullet train project in India, Japan will be the primary financier wherein it will fund 81% of the project cost at a minimal interest rate of 0.1%, the overall cost is expected to be 1.1 lakh crore. Additionally, it will also provide the Japanese technology for the same. The project is expected to be completed by FY22. It is expected that Japanese companies plans to invest about Rs 5 lakh crore including the bullet train project funding. Historically, many Japanese companies have set up their manufacturing units in India and selling their products in the Indian market. Below mentioned are some of the companies which would benefit from increase collaboration between the two nations.

Maruti Suzuki India Ltd (MSIL)

Japan-based Suzuki Motor Corporation is the holding company of Maruti Suzuki India Ltd with 56.2% stake. MSIL is the most trusted and popular car manufacturing brand in the country. It owns 50% domestic market share in passenger car segment. Some of the popular car brands manufactured by MSIL are Wagon R, Ertiga, Swift, Swift Dzire and Baleno. We expect healthy financial performance in the coming years on account of h2 demand for its premium car models such as Baleno Dzire and Brezza. MSIL’s market share will improve further due to uptick in rural demand, new launches (Baleno RS and Vistara) and strong distribution reach. The bottom line of the company has grown at 32% CAGR in the past 3 years.

Sona Koyo Steering Systems Ltd (SKSSL)

Sona Koyo Steering Systems Ltd (SKSSL) is the flagship company of The Sona Group. Its collaborator and partner, JTEKT Corporation (70.4% stake in SKSSL), is the market leader in Japan and the world's largest steering systems manufacturer. SKSSL is the largest manufacturer of steering systems in India.  Maruti Suzuki, Toyota, Hyundai, Tata Motors are some of its customers in the country. We expect SKSSL to benefit from traction in steering segment.  It is the first Indian company to develop e-axles used in e-rickshaw. Additionally, it is aggressively focusing on improving its forging business and expand its domestic farm equipment market.

SML Isuzu Ltd (SMLI)

SMLI is the commercial vehicle manufacturer in India.  SMLI is the first company to manufacture and supply state of the art fully built buses, ambulances and customized vehicles. Japan-based Sumitomo Corporation and Isuzu Motors own 44% and 15% stake in the company. We expect pickup in commercial vehicle sales due to BS IV implementation and expected scrappage policy in MH&CV segment to benefit the business of the company. It has also launched two new bus models named executive Ex Coach and Ecomax. These buses are designed for tour and travel operators and shuttle service for staff members. The bottom line of the company has grown at 53% CAGR in the past 3 years.

Honda Siel Power Products Ltd

Honda Siel Power Products Limited (HSPP) is a domestic power product company.  It is the subsidiary of Japan based Honda Motor Co. with 66.6% stake in the company. HSPP manufactures and markets power products like Portable Generators, Water Pumps and General Purpose Engine. HSPP enjoys majority of market share in Generators and Water pumps segment.

Asahi India Glass Limited

Asahi India Glass Ltd. (AIS) is India's established glass solutions company and a dominant player in the automotive glass and architectural glass segments. It commands over 70% share in the Indian automotive glass market. Asahi Glass Co. Ltd of Japan owns 22.2% stake in the company. The construction industry’s demand shift from concrete to glass building materials is likely to benefit company’s architectural segment. Besides, higher sales by its major clients, Maruti Suzuki (Baleno) and Renault (Kwid) will boost sale of automotive glass. The company has an average ROE of 26% for the past 3 years.

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5 Japanese Backed Companies in India

07 Aug 2019 Nikita Bhoota

Untitled Document

India and Japan have deepened their strategic ties over the years. In recent developments, the two countries have signed 15 MoUs, which includes the flagship bullet train project. Talking about the recent bullet train project in India, Japan will be the primary financier wherein it will fund 81% of the project cost at a minimal interest rate of 0.1%, the overall cost is expected to be 1.1 lakh crore. Additionally, it will also provide the Japanese technology for the same. The project is expected to be completed by FY22. It is expected that Japanese companies plans to invest about Rs 5 lakh crore including the bullet train project funding. Historically, many Japanese companies have set up their manufacturing units in India and selling their products in the Indian market. Below mentioned are some of the companies which would benefit from increase collaboration between the two nations.

Maruti Suzuki India Ltd (MSIL)

Japan-based Suzuki Motor Corporation is the holding company of Maruti Suzuki India Ltd with 56.2% stake. MSIL is the most trusted and popular car manufacturing brand in the country. It owns 50% domestic market share in passenger car segment. Some of the popular car brands manufactured by MSIL are Wagon R, Ertiga, Swift, Swift Dzire and Baleno. We expect healthy financial performance in the coming years on account of h2 demand for its premium car models such as Baleno Dzire and Brezza. MSIL’s market share will improve further due to uptick in rural demand, new launches (Baleno RS and Vistara) and strong distribution reach. The bottom line of the company has grown at 32% CAGR in the past 3 years.

Sona Koyo Steering Systems Ltd (SKSSL)

Sona Koyo Steering Systems Ltd (SKSSL) is the flagship company of The Sona Group. Its collaborator and partner, JTEKT Corporation (70.4% stake in SKSSL), is the market leader in Japan and the world's largest steering systems manufacturer. SKSSL is the largest manufacturer of steering systems in India.  Maruti Suzuki, Toyota, Hyundai, Tata Motors are some of its customers in the country. We expect SKSSL to benefit from traction in steering segment.  It is the first Indian company to develop e-axles used in e-rickshaw. Additionally, it is aggressively focusing on improving its forging business and expand its domestic farm equipment market.

SML Isuzu Ltd (SMLI)

SMLI is the commercial vehicle manufacturer in India.  SMLI is the first company to manufacture and supply state of the art fully built buses, ambulances and customized vehicles. Japan-based Sumitomo Corporation and Isuzu Motors own 44% and 15% stake in the company. We expect pickup in commercial vehicle sales due to BS IV implementation and expected scrappage policy in MH&CV segment to benefit the business of the company. It has also launched two new bus models named executive Ex Coach and Ecomax. These buses are designed for tour and travel operators and shuttle service for staff members. The bottom line of the company has grown at 53% CAGR in the past 3 years.

Honda Siel Power Products Ltd

Honda Siel Power Products Limited (HSPP) is a domestic power product company.  It is the subsidiary of Japan based Honda Motor Co. with 66.6% stake in the company. HSPP manufactures and markets power products like Portable Generators, Water Pumps and General Purpose Engine. HSPP enjoys majority of market share in Generators and Water pumps segment.

Asahi India Glass Limited

Asahi India Glass Ltd. (AIS) is India's established glass solutions company and a dominant player in the automotive glass and architectural glass segments. It commands over 70% share in the Indian automotive glass market. Asahi Glass Co. Ltd of Japan owns 22.2% stake in the company. The construction industry’s demand shift from concrete to glass building materials is likely to benefit company’s architectural segment. Besides, higher sales by its major clients, Maruti Suzuki (Baleno) and Renault (Kwid) will boost sale of automotive glass. The company has an average ROE of 26% for the past 3 years.

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