Some key points for easy reference –
- Kinetic Engineering (KE) founded in 1972 is the same Company that had launched Luna Moped in 1975. It also had partnered (JV) with Honda and launched the famous Kinetic Honda Scooter in 1980s (was subsequently sold to Mahindra in 2008 who later wound it up).
- A company with pedigree of Luna and Kinetic Honda has a market cap of only Rs 108 crore as on September 14, 2021. Sums up the management of the Company over years. It has revenues of about Rs 100 cr and was loss making till couple of quarters back. It had outstanding debt of ₹250 crore that it has now repaid.
- Currently, company is primarily an auto components company focused on transmission and engine components – gears, shafts, axles, crankshafts, cylinder heads, camshafts etc. There are some other companies in the group with related and non related businesses as shown below.
Overall it seems a diversified group – infact maybe too much (look at marketing of financial services, parking systems etc) .
However, from shareholder’s perspective, KE – the flagship Company of the group has been a significant wealth destroyer. Stock price declined from around Rs 200 in 2005 to Rs 61 as on date (April 14, 2021) !
Now the Company has informed that it wants to focus on EV kits for three wheelers to begin and two wheelers to follow.
Ajinkya Firodia, MD of the Company said – “We have developed a complete EV kit that is 100% Indian. We are supplying the axle and gear box, and have sourced the motor and controller from domestic third parties. The firm is expecting ₹40 crore revenues from this business and will soon introduce a kit for EV two-wheeler assembly.”
Demand in India for EV three-wheelers is about 20,000, sourced mostly from China.
Company given it’s pedigree combined with the latest noise around electric vehicles, has rightfully ventured into it. However, it’s too early to draw any conclusions but is worth keeping a watch on.