GKN Driveline Pre IPO Research Report
Discover and get a complete analysis report on GKN Driveline share price, Management, Business Model, Financials, Growth, Valuations, Funding Rounds, News and get the latest updates on GKN Unlisted Shares on Planify.
ISIN
INE527A01014
Face Value ₹10.00 Total Share 1,27,73,061 Total Income ₹689.83 Cr Profit After Tax ₹56.52 Cr EPS ₹44.00 P/E 29.55 P/B 3.92
Market Capitalisation ₹1,660.50 Cr Enterprise Value ₹1,567.86 Cr Book Value ₹331.42
Intrinsic Value ₹1,189.47
Dividend Yield 4.77 % Earnings Yield 3.38 %
Sector Consumer Discretionary
Sub-sector Auto Parts Category Delisted Cashflow - Operations ₹71.74 Cr
Cashflow - Financing -₹108.76 Cr
GKN Driveline Growth
Compounded Sales Growth • -29.43% 1 Year • -10.88% 4 Year • -9.48% 6 Year
Compounded Profit Growth • -10.63% 1 Year • -10.46% 3 Year • 71.39% 6 Year
Return On Equity
• GKN Driveline (India) Limited is a part of GKN Group, which is primarily in the business of manufacturing and sale of driveshafts to original equipment manufacturers in the automobile industry. It offers drive axle assembly and related products.
• GKN parent group company is GKN PLC. It has registered offices in the United Kingdom. GKN PLC is a global partner to the automotive industry. More than 50% of the 80 million new cars sold every year contains GKN Automotive technology.
• The company is also receiving support and guidance from GKN Group, which helps the company to remain competitive and further step-up its overall business performance.
• The company is having technical collaboration with GKN Driveline International GmbH, Germany since 2003 and under the collaboration agreement, the company draws various state of the art technologies from GKN.
• GKN Driveline has five manufacturing plants. Two plants are in Haryana, one in Maharashtra, one in Tamil Nadu, and one in Gujarat.
• GKN Driveline has impressive clients of automotive industry leaders such as Toyota, Ford, Bajaj, Fiat, Honda, and Suzuki.
• GKN Driveline (India) Limited ("GKN" or "The Group") was incorporated as Private Limited on July 25, 1985. The company’s name changed more than once and the latest change was from GKN Driveshafts (India) Limited to GKN Driveline (India) Limited on July 3, 2003.
• Sale of Services
• Other Operating Income
• Other Income
• Sale of Manufacturing and Sale of driveshafts
• GKN
Driveline Product & Services
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Drive axle assemblies including constant velocity joints. (NIC Code - 29301)
• GKN
Driveline Assets
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The company's assets as on 31st March, 2021
Particulars
Amount in Rs. Cr.
Freehold Land 20.68 Building 59.79 Plant and machinery 212.75 Computers 4.24 Office and other equipments 8.69 Furniture and fixtures 1.27 Vehicles 1.32 Softwares 7.59
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GKN Driveline Industry Overview
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Industry Statistics
• The drive axle, which runs from the differential to the tyre, is an important automotive component. Drive axles are usually housed in axle housings, which protects the component and helps it to perform more efficiently. They are required to operate both the front and rear axles and can be found on both frontwheel-drive and rear-wheel-drive cars.
• The automotive driveshaft market in India was valued at USD 1.24 billion in 2020, and it is likely to reach a value of USD 1.69 billion by 2026, with a CAGR of 4.97% during the forecast period, 2021-2026.
• Consumer desire for improved vehicle performance, improved fuel efficiency, and a better driving experience, combined with the tightening of carbon emission restrictions and standards, has resulted in significant changes and improvements in the driveshaft sector. Improved fuel efficiency, stricter carbon emission regulations, increasing investments in R&D activities by automakers and suppliers to improve vehicle performance, and other reasons are propelling the automotive driveshaft market forward.
• In the future years, the automotive driveshaft market is likely to be driven by rising sales of all-wheel-drive vehicles, rising sales of SUVs, and rising demand for lightweight components.
• Companies are focusing on enhancing the performance of their drivetrain as various materials and methods have been tested to fabricate the drive shaft. When the automotive industry is moving toward zero emissions, auto parts manufacturers are focusing on reducing the number of parts and reducing the overall weight of the vehicle
• As the demand for electric vehicle is growing, vehicle manufacturers are putting all their efforts in manufacturing the most efficient electric vehicles, and the driveshaft manufacturers are updating their product list to supply the best products to the OEMs to gain the market share.
• The Indian Small Commercial Vehicle Market in the year FY2021 stood at USD1909. 91 million. The market is anticipated to grow further with a CAGR of 15.14% in the forecast years FY2023-FY2027, to achieve a market value of USD 4256.93 million by FY2027. With this increasing sales of automobiles and consumer demand, the automotive driveshaft market in India is poised to grow at a high rate during the forecast period. India generated a revenue of USD 1.33 billion in automotive driveshaft market and is expected to reach USD 1.69 billions in FY26 in revenue.
• The outbreak of COVID-19 has created a new economic situation for the automotive industry across the world, particularly for product manufacturers. The demand for parts has gone down due to low automotive production, and many places have stopped production with government-imposed lockdowns across the world, which led the driveshaft manufacturers to huge losses.
Future Prospects
• The automotive sales in the country declined in 2019 because of the transition to BS6 engine norms. The growth further decreased due to the economic slowdown and lockdowns caused by COVID-19. India became the fourthlargest auto market in 2019, displacing Germany with about 3.99 million units sold in the passenger and commercial vehicles categories. India is expected to displace Japan as the third-largest auto market by the end of 2021.
• The vehicular fleet in Indian cities is much younger than in richer nations of the European Union and in the United States, where the average age of cars is 8 years and 11 years, respectively. With the growing modernization in vehicles in the country and the rise in safety standards in line with the international standards, the average age of vehicles in the country is increasing, which would enhance the demand for driveshafts in the aftermarket segment.
Government Initiatives
• The Government of India’s Automotive Mission Plan (AMP) 2006–2016 has come a long way in ensuring growth for the sector. Indian Automobile industry is expected to achieve a turnover of US$ 300 billion by 2026 and will grow at a CAGR of 15 per cent from its current revenue of US$ 74 billion.
• As per the Union Budget 2019-20, Government moved GST council to lower the GST rate on EVs from 12 percent to 5 percent. Also, to make EVs affordable to consumers, Government will provide additional income tax deduction of Rs 1.5 lakh (US$ 2,115) on the interest paid on loans taken to purchase EVs
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GKN Driveline Awards & Achievements
• Faridabad Plant won 1st Runner Up position “Best Innovation Practices in EHS” competition organized by CII at India Level where 40 top companies participated. Also, it won Silver Award in Low-cost automation organized by CII at National Level. It implemented upgradation of ETP by introducing MVR concept (Mechanical Vapour recompression) in order to meet stringent discharge norms.
• Dharuhera Plant won first prize in Quality Circle organized by CII. In order to contribute to society during COVID pandemic FAR/DHA plants donated PPE like face mask, hand sanitizers, PPE kits etc. to the local administration.
• ORA awarded “First” in CII SR – EHS Excellence Awards 2020 in Auto & Automotive sector with Highest 5 Star Rating for the second consecutive year. Gold Awards awarded in QCFICC Kaizen (virtual) competition in Sep 2020.
• Won “Gold Awards – 2 Nos” and “Silver Award –1 No” in POKA YOKE competition conducted by QCFI in the month of Mar-21’. It achieved Zero PPM award from TKML for the year 2019 in Aug 2020. ORA retained Ford-Q1 GOLD status. IATF 16949:2016 Surveillance audit completed successfully.
• GKN Pune awarded with Supplier quality Excellence award 2019 for outstanding performance in 2020. Spicer SSA Audit completed with green status. TATA PVBU – PCPA system audit completed with green status & 87% score. CQI-9 Audit by Spicer was successfully completed without any major NC.
GKN Driveline Strengths
• GKN Group, which captures 12% of the automotive driveshaft market share globally provides support and guidance to the company in areas such as marketing, human resources, application engineering, supply management, and information technology, among others, allowing it to stay competitive and improve its overall business performance.
• The company has no borrowings except lease liabilities.
• The company serves all the industry leaders for their requirements for drive shafts. 48% of the vehicles sold with all-wheel drive systems in 2020 had the company’s driveshaft system.
• GKN Driveline, the global leader in drive systems, which captures 12% of the global market is accelerating its development of next generation eDrive technologies in response to the rapidly increasing global demand for electrified vehicles, which is expected to disrupt the market of future.
GKN Driveline Shortcomings
• GKN Driveline has no website of themselves, which reduces the opportunity to increase their footprints and visibility.
GKN Driveline Opportunities
• The number of operating vehicles across the globe has been increasing significantly, due to the rising sales of new and used vehicles, coupled with the rising average age of vehicles. With the increasing number of vehicles in use/operation, the demand for aftermarket drive shafts has also increased. The global automotive motors market is projected to reach USD 25,719 million by 2025 from USD 20,321 million in 2020, at a CAGR of 4.8%. The advent of fuelefficient technology will have a significant impact on hybrid electric and battery electric vehicles, which, in turn, will drive the automotive motors market.
• Further, the increasing average age of passenger cars and commercial vehicles is driving the demand for drive shafts in the aftermarket space.
GKN Driveline Threats
• There are no direct substitutes for automotive driveshaft in the automotive industry. However, buyers may switch to independent aftermarket (IAM) players from the original equipment suppliers (OES), owing to pricing concerns during the time of replacement.