5 Japanese Backed Companies in India

Nikita Bhoota

15 Sep 2017

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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Why to Choose Mutual Funds Instead of Directly Investing Into Equities?

Whether to invest in equities or mutual funds is a question that has plagued every investor. As someone who needs the best value for his/her investment should you invest in equity directly or via mutual funds?

Let’s start by first understanding what these two terms ‘equities’ and ‘mutual funds’ stand for-

Equities- Equities generally represent ownership of a company. If you own any equity in a company, you are a part owner of the said company (depending on how much equity you own).

Mutual Funds – It is an investment scheme which is professionally managed by an asset management company. It pools together the resources of a group of people and invests their money in equities, debentures, bonds and other securities.

Why choose mutual funds over equities?

For people who’ve never invested in either stocks or mutual funds, it is hard to know which is better and where to start. Broadly speaking, if you are a novice investor, mutual funds are not only less risky but also way easier to manage. Here are some ways in which investing in mutual funds is beneficial as opposed to investing in equities -

Diversification

Mutual funds provide more diversification as compared to an individual equity stock. When you invest in equity, you are investing in a single company which has its inherent risk. For example, if you invest Rs.20,000 in buying equities of one company, you could face a total loss if that particular company performs poorly in the market.  

If you invest the same amount in mutual funds, it will be invested in different kinds of stocks and financial instruments, high-risk and low-risk both, so you might not face total loss even if one company does poorly.

Scale of Investment and Lower Costs

For an individual investor buying and selling stocks is a difficult task due to its high price. Thus, any gains made from stock appreciation are nullified if the overall trading costs are considered. Comparatively with mutual funds, as the money is pooled from a large number of investors, the cost per individual is lowered.  

Another advantage of mutual funds is that you don’t need to invest large sums of money. Buying equities for a profitable venture needs huge amounts of money, a minimum of few lakhs. With mutual funds, you can start with Rs.1000 and earn profits on that as well.

Convenience

Keeping an eye on the markets everyday is a time-consuming business, especially if you are investing as a side gig. There are people who spend their lives studying the market and still end up sustaining heavy losses. Though investing in mutual funds does not guarantee high returns, it is stress-free and needs less work as compared to investing in equities.

To sum it up

It is important to remember that mutual funds have their own disadvantages as well. Thus, as with any financial decision, educating yourself and understanding the suitability of all the available options is the ideal way to invest. 


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5 Japanese Backed Companies in India

Nikita Bhoota

15 Sep 2017

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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