TVS & Murugappa: The Aerospace, Defence & Semiconductor Connection
Can aerospace, defence and semiconductors bring a new phase of growth to Sundram Fasteners and Carborundum Universal (CUMI)?In this episode, we look at two established industrial businesses from the TVS and Murugappa groups. We start with how we found them through conference-call summaries and StockScans, then work through their products, competitive advantages, growth plans and valuations.
Sundram Fasteners is expanding in aerospace, wind and other non-auto applications. CUMI is investing in advanced ceramics for semiconductor equipment, fuel cells and defence.
The question is how much these opportunities can contribute to the overall businesses, and what could delay that growth.
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We cover:
• Why customers care so much about the quality of a small component, and how supplier approvals can create lasting relationships.
• Sundram’s six business divisions, its exposure to the auto cycle and the opportunities beyond it.
• How CUMI’s abrasives, ceramics and electro-minerals businesses fit together, including the problems in its overseas operations.
• What CUMI’s semiconductor opportunity actually involves: supplying ceramic parts used inside chipmaking equipment.
• The assumptions behind our valuation scenarios and the risks we would keep tracking.
These are businesses 14 and 15 in our Unique Business Analysis series. The aim is to show you how to study a company and spot changes worth investigating in its conference calls.
Which of these two businesses would you like us to revisit as the new projects progress? Let us know in the comments.
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CHAPTERS
00:00 Two businesses entering new markets
01:53 How we found these companies
02:26 Sundram Fasteners: the aerospace opportunity
04:36 Why we started studying CUMI
10:40 What a fastener does
13:00 Sundram Fasteners: six business divisions
16:30 Powertrain components and the EV programme
21:30 How a fastener earns its margin
25:00 Wind, aerospace and railways
26:00 What’s driving Sundram’s growth
28:15 Sundram’s capex plans
30:00 Sundram Fasteners: risks
31:00 Sundram Fasteners: valuation scenarios
32:30 CUMI: abrasives, ceramics and electro-minerals
34:30 CUMI’s overseas operations
36:15 Abrasives: competition and margins
37:00 Why ceramics matter to CUMI
38:24 Semiconductors, fuel cells and defence
39:48 Changes in ceramics growth guidance
40:02 CUMI: valuation scenarios and risks
41:18 What to take away from these two businesses
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Use code: SOICTRIBE10
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DISCLAIMER
This video is for educational and informational purposes only. Nothing in it constitutes investment advice, research or a recommendation to buy, sell or hold any security.
Any stocks, sectors or themes mentioned are used only to illustrate investing frameworks and market history. Views expressed are personal, current as of the recording date and may change without notice.
Investments in securities markets are subject to market risks. Please read all related documents carefully and consult a SEBI-registered investment adviser before making investment decisions.
SOIC Intelligent Research LLP is registered with SEBI under the SEBI Research Analysts Regulations, 2014, with registration number INH000012582.
#SOIC #SundramFasteners #CarborundumUniversal Receive SMS online on sms24.me
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