IGARASHI MOTORS INDIA LIMITED
Know the Company
Igarashi Motors India Limited is incorporated in 1992 as CG Igarashi Motors Limited, as a JV between Crompton Greaves Limited, Igarashi Electric Works Limited, Japan and International Components Corporation, USA. In 2003, Crompton Greaves sold its entire holding to Igarashi Electric Works and the company’s name changed to ‘Igarashi Motors India Limited’ (IMIL). Later, International Components Corporation also exited from the JV. Presently, Igarashi Electric Works H.K. Ltd and Igarashi Electric Works Limited, Japan together holds 75% of the stake in the company. IMIL has nine manufacturing facilities and two logistic warehouses which all are located at MEPZ-SEZ, Chennai and at Maraimalai Nagar, Tamil Nadu.
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IMIL is engaged in the production of various type of DC motors and motor accessories mainly for automotive sector and consumer electronics sectors. The company has developed energy-efficient Brushless DC motor (BLDC) in 2020s, which are widely use in consumer electrical applications like fans. The company’s products also used in office automation equipment, power tool, electric fishing reel and home appliance, etc.
IMIL’s international clientele includes Bosch, Continental, Cooper, Delphi, Hella, Borg Warner, Valeo, Visteon, etc. And Key domestic clients include, Crompton Greaves, TEL turbo energy, Padmini, Havells, Bajaj Electricals, RR Kabel, GM and V-guard etc.
Product Portfolio of the Company
Product for 4W applications:
IMIL is manufacturing several products for various applications into the Automotive Segment, specifically in the areas of Engine, Turbo and Exhaust for both global and domestic markets. Over the years, company has expanded its offerings from purely in the ETC space to being a player in Air Management (EGR, WGA, VGT, CCV). The company also continued to hold a leading position in Global TAM 4W market.
Energy-Efficient BLDC Motor for Consumer Appliance Segment:
IMIL has launched the BLDC motor platform for energy-efficient consumer electrical appliances in 2020. Until FY2023, the company have cumulatively inhabited around 1.6 Million motors with five models on 14 variants using the remote unit.
ESDM (Electronic System Design & Manufacturing):
IMIL’s efforts in the past four years in Electric Motor Drivers and controllers have given it a strong base of engaging in new opportunities in the ESDM Space. The company had set-up a new EMS line for high-speed dual lane EMS machines to meet the growing domestic demand.
Products ready to launch:
Park Lock Actuators (PLA)
PLAs are fitted either to Internal Combustion Engine (ICE) vehicles with automatic transmission or to Battery Electric Vehicle (BEV). Park lock actuators to secure the vehicle against rolling away from parking and also hill assist mode. Company’s program team is working on 4 programs for Export to Tier-1 customers, expected to launch during the year 2025.
Electric Parking Brake (EPB):
EPB is a technology-agnostic application required for both ICE and BEV, which are common in new cars due to its feature-rich capabilities. The Global Tier-1 customers of Igarashi Group have shown interest to shift sourcing of EPB to India. Company’s program team is working on 10 programs with six Tier-1 customers including global and domestic, for launch during the year 2025.
Trunk Opening and Closing Device (TOCD):
IMIL leads TOCD motor applications in the global market. The Global Tier-1 customers of Igarashi Group have shown interest to shift sourcing TOCD. Company’s program team is working on commercial launch of two programs for two Global Tier-1 customers, which is planned during FY2025.
Traction motor for EVs:
IMIL has developed a 3.3 kW Traction motor for the E2W and made the concept samples which were tested for preliminary performance by one of its European customers who is working to capture the Indian E2W market. Also, the 7.5 kW Traction motor developed for E3W is being tested by the customer for vehicle-level fitment and performance verification.
PCB controller:
Under “Make in India” campaign, IMIL is actively working on competitive PCB controller for Domestic Exhaust fans and TPW fans. The company would be launching motors, shortly, for TPW and air coolers which demonstrates the strength of its motor manufacturing capabilities and will position it as a full-service supplier to the various BLDC Fan OEMs.
Strengths
IMIL is engaged in the production and export of Permanent Magnet DC Motors for Air Management including Powertrain and seat applications as well as motor accessories mainly for the Automotive Sector. The company is a prominent player in the global automotive Actuator market, which is an essential part of electronic control systems for new age vehicles, specifically in passenger cars and commercial vehicles. Growth in the automotive actuators market supported with the introduction of BS-VI norms, which paving the way for commencement of high-performance internal waste-gate actuator, variable turbine geometry and Exhaust gas circulation, etc., gives immense growth opportunity for the company. The company has a track record of more than two decades in performance control method and a system portfolio (ETC, EGR, VTG) segment globally and a significant market share of above 42% in the 4W and 2W domestic Tier 1 customers. Now, the company is working with all the leading auto giants and targets to increase its market share to 60%.
IMIL also successfully diversified its products portfolio suitable for newer technology platforms such as fast-moving electronic goods (FEMG), specifically fans market. Company’s key FMEG marquee customers collectively have a market share of around 82% in the organized ceiling fans market.
IMIL has a strong parentage and long-standing relationship with marquee clients, it has been supplying DC motors to Tier I suppliers of leading auto manufacturers across the world. Exports contributes significant portion of the company’s revenue albeit it increases domestic sales. Export contributes 70% of the company’s revenue though it was over 82% in the previous financial year.
IMIL has a strong client base from the global automotive giants and its products are used in critical applications, so the risk of the customers switching over to competitors is very minimal.
Financials Improve
IMIL, for the quarter ended September 2023 reported revenue at Rs 178 crore, up 2.71% Y-o-Y from Rs. 174 crores in Q2FY2022. At the same period Net Profit registered at Rs. 1.46 crore, up 212% from Rs. 0.47 crore in September quarter 2022. EBITDA stands at Rs. 17.8 crore in September 2023 up 11.61% from Rs. 16 crores in September 2022.
Bright Industry Outlook
New-age vehicles, equipped with automatic transmissions are in strong demand due to its ease of driving and hassle-free operations. Automotive sector across the globe undergoing continuous innovation and now the medium to higher end vehicles, especially PVs are equipped with dozens of micro-motors to control various functions from automatic head light adjustments to Park Lock Actuator systems. This transformation expected to increase in future and it gives strong growth opportunity for the company, going forward.
While the automotive sector accounts major portion of the IMIL’s revenue, to avoid the sectoral concentration risk, company has diversified its business into energy efficient BLCD motors for the consumer electrical segment. The BLDC motors have varied applications, and the company has a capacity to produce up to 2.7 Mn units.
Presently, electricals and electronic appliances also hails more and more auto features, which also gives strong growth opportunity for the company, especially, considering its long-standing relationship with industry leaders. The company has reporting gradual increase in sales and expected to go up further in the future. The product and market segment diversification are progressing well in the company and in a couple of years, IMIL will see a right mix between geographies and product segments.
Risk
Growth of the IMIL’s products heavily depending on consumer spending. High inflation and elevated interest rate regime, if continues, may cause some slowdown in the automotive and consumer durable sectors, which eventually cause of lower demand and revenue losses for the company.
IMIL earns majority of its revenues from a few large OEMs clients across the globe. The company’s income stability and order book position also depend heavily on the orders from these large customers, so client concentration risk is higher for the company.
Sector: Electronics
Market Price: Rs. 532.85 as on today
FV: ₹10/-
Stock Name: Igarashi Motors India Ltd
BSE Code: 517380, NSE Code: IGARASHI
Market Cap.: Rs 1655 Cr
Book Value: Rs. 140
Segment: Automobile and Auto Components
Incorporation: 1992
Headquarters: Chennai
