Building Nivedha ❤️ | Bullish on India 🇮🇳 #100DaysStartupChallengeGuy | Entrepreneur 🧑💼
Tearing Down EV Industry of India 🇮🇳
The global electric vehicle (EV) market is developing at a rapid pace
The Indian EV market is also evolving fast as close to 0.32 million vehicles were sold in 2021, up 168% YoY.
Ongoing electric vehicle adoption in India is based on the Paris agreement to reduce carbon emissions, improve the air quality in urban areas and reduce oil imports.
The Indian automobile industry is the fifth largest in the world and is expected to become the third largest by 2030.
Business Opportunities
The EV push in India opens a plethora of business opportunities across three key segments - mobility, infrastructure, and energy.
Opportunities in EV franchising, EV OEM market, battery infrastructure, solar vehicle charging, and battery swapping technology among several others.
According to the Ministry of Skill Development and Entrepreneurship (MSDE), the EV industry could add 10 million direct jobs by 2030, and 50 million indirect jobs in the sector.
Regardless of who wins the race of electrical vehicles, Hydrogen vehicles or god knows some other Technology, Do you guys think auto ancillary will survive nevertheless?
Even if the car is electric based, Hydrogen based, or any other technology you will still require headlights, breaks, seats, paint, windows and so many things more.
OEM Supplies - Engineering parts, Camera System, Engine, etc.
After Market - Once the car is given out what other things are required tires, seats, etc.
Exports - Whatever we export outside of India in auto ancillary.
Growth Driver for the sector :
- The enforcement of BS-VI standards
- Cost-effective location for manufacturing
- Export opportunities
- Robust demand
- Policy support
Red Flags :
- Inflation & Margin Pressure
- Pricing problems
- Unorganised and Fragmented
- R&D and Quality control issues
- Asses heavy business models
What are the fundamentals to look after while picking stocks?
- ROCE (Return on capital employed) > 15%
- ROE (Return on equity) > 15%
- D/E (Debt to equity) < 2
- PEG (Price to Earnings / Profit growth) < 2
- EPS This year > EPS previous year
- OCF This year > OCF previous year
- Increased FII Holding (QoQ and YoY)
List of potentially good companies in the sector for future long-term growth.
Battery
- Amara Raja Batteries Ltd
Auto Parts
- Endurance Technologies Ltd (CN)
- Samvardhana Motherson International Ltd
- Sundram Fasteners Ltd
- Sona BLW Precision Forgings Ltd
Industrial Machinery
- Greaves Cotton Ltd
Two-wheelers
- Hero MotoCorp Ltd
IT Services & Consulting
- KPIT Technologies Ltd
Four Wheelers
- Mahindra and Mahindra Ltd
- Tata motors
Power Generation & Transmission
- Power Grid Corporation of India Ltd
- Tata Power Company Ltd
- Adani Power
Software Services
- Tata Elxsi Ltd
The Indian EV Industry is slowly gathering momentum, supported by government initiatives and a rise in crude oil prices, as people look for alternative sources to reduce their monthly bills.
Several initiatives taken by the government to support the manufacturing and adoption of electric vehicles in the country should help in achieving the target of 100% EV adoption by 2030.
I hope this helped you understand the EV industry in India!
Thank you for reading, Keep Investing!
With Love ❤️
Team Nivedha
Dhruval Ramani
Building Nivedha ❤️ | Bullish on India 🇮🇳 #100DaysStartupChallengeGuy | Entrepreneur 🧑💼
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