Daily Brief India: Jain Resource Recycling, Exide Industries, SGX Rubber Future TSR20, Tata Consumer Products, Atlanta Electricals, Samvardhana Motherson International Ltd, Muthoot Finance, ABB India Ltd, Polycab India , Gail India and more

• Jain Resource Recycling (2300699D IN) is looking to raise about US$142m in its India IPO.
• The company is primarily focused on manufacturing of non-ferrous metal products by recycling of non-ferrous metal scrap. It is also engaged in trading of non-ferrous metals and other commodities.
• In this note, we take a quick look at the peer comparison and IPO valuations.

• Exide Industries is doubling down on lithium-ion cell and pack manufacturing with huge committed capex, while sustaining its dominant lead-acid franchise.
• The company’s strong cash flows from lead acid batteries are funding high-risk, high-reward bets on EV and renewable storage, positioning it as India’s only dual-chemistry energy storage leader.
• Execution risk in lithium-ion scale-up is high, but Exide’s brand equity provide a buffer. The story now hinges on whether early-mover advantage in Li-ion can translate into sustainable returns.

• Tire makers see profit pressure despite revenue gains  
• JK Tyre eyes double-digit growth, expands global footprint  
•  CEAT eyes expanding Chennai plant at US$51 million spend  

• Transformation into a Diversified FMCG Major: Tata Consumer Products (TCPL) is aggressively diversifying beyond its core tea and salt businesses, moving into higher-growth categories like packaged foods (Tata Sampann), snacks (Tata Soulfull), and ready-to-drink beverages. Recent acquisitions of Capital Foods (Ching’s Secret, Smith & Jones) and Organic India significantly expand its total addressable market and enhance its presence in high-margin segments.
• Strong Brand Equity and Distribution as Key Moats: The company leverages the immense trust associated with the ‘Tata’ brand, providing a significant competitive advantage. Its extensive distribution network, reaching millions of retail outlets, combined with a growing e-commerce presence, creates a formidable barrier to entry and a platform to scale new product launches and acquisitions effectively.
• Focus on Premiumization and Innovation Driving Growth: TCPL is strategically focused on premiumizing its portfolio across categories, such as value-added salts and premium tea variants, to capture evolving consumer preferences and improve margins. A consistent pipeline of new product launches, particularly in health and wellness, caters to modern consumer trends and is a key driver of future growth.

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• Atlanta is the third largest manufcaturer of transformers in India. With recent capex coming online, it boasts of capacity and product offering in line with the market leaders.
• The company has a strong order book of 1,600cr and given the fairly short execution timeline is positioned to deliver 25-30% growth in FY26.
• We believe IPO is being fairly valued at 20-24 times FY26 EBITDA, implying a 30-35% discount vs market leader Transformers & Rectifiers (India) Ltd (TRIL IN) 

• Global Automotive Component Leader with Diversified Operations: Samvardhana Motherson International Ltd. (SAMIL) is a leading global manufacturer of automotive components, with a well-diversified portfolio across products, geographies, and customers. The company is a key solutions provider to major automotive original equipment manufacturers (OEMs) worldwide.
• Strong Growth Trajectory and Ambitious Future Plans: The company has a proven track record of strong financial performance, characterized by consistent revenue and profit growth. SAMIL has laid out an ambitious ‘Vision 2030’ with a target of achieving $108 billion in revenue, driven by organic growth, strategic acquisitions, and diversification into non-automotive sectors.
• Focus on Financial Prudence and Shareholder Returns: Despite its aggressive growth strategy, SAMIL maintains a focus on financial discipline, with a healthy leverage ratio and a commitment to improving its return on capital employed (ROCE). The company also has a stated policy of distributing a significant portion of its profits as dividends.

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• Dominant Market Leader in a Niche, High-Growth Sector: Muthoot Finance is the largest gold financing company in India, a segment poised for significant growth due to the cultural affinity for gold and the vast, untapped potential within the unorganized sector. Its strong brand recognition and extensive branch network create a significant competitive advantage.
• Robust Financial Performance and Strong Growth Trajectory: The company has consistently demonstrated impressive financial results, with strong growth in revenue, net income, and assets under management (AUM). Recent quarterly performance has been particularly strong, driven by rising gold prices and increased demand for secured credit.
• Strategic Focus on Digital Transformation and Diversification: While gold loans remain its core business, Muthoot Finance is strategically investing in technology to enhance customer experience and operational efficiency. The company is also gradually diversifying its product portfolio to include housing finance, personal loans, and insurance, which will reduce its dependence on a single asset class.

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• Strong Market Position and Growth Prospects: ABB India is a leading player in electrification and automation, well-positioned to capitalize on India’s infrastructure development, energy transition, and push for industrial automation. The company has demonstrated a robust growth track record, with a 3-year net income CAGR of 53.28%.
• Solid Financial Performance and Resilience: The company exhibits strong financial health with consistent revenue growth, improving margins, and a debt-free balance sheet. Its resilience is rated 5/5 by Smartkarma, reflecting high profitability and a strong ability to meet obligations.
• Premium Valuation and Margin Risks: The stock trades at a significant premium to its peers, with a P/E ratio of 78.28. An increasing share of large project orders, which typically have lower margins and longer execution times, could pose a risk to future profitability.

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• Polycab India is the largest manufacturer of wires and cables in India, holding a significant market share of 25-26% in the organized market. The company has demonstrated a consistent track record of outperformance and market share gains.
• The company is strategically expanding its Fast-Moving Electrical Goods (FMEG) segment, which includes fans, lighting, switches, and solar products, to diversify its revenue streams and capitalize on India’s consumption growth. This segment has grown at a CAGR of 25% over the last nine years.
• Fueled by strong government infrastructure spending, a revival in the real estate sector, and the global ‘China Plus One’ strategy, the outlook for the Indian wires and cables industry is robust, positioning Polycab for sustained growth.

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• Dominant Market Position with Integrated Model: GAIL holds a commanding position in India’s natural gas sector, operating across the entire value chain from transmission and trading to petrochemicals and city gas distribution. Its extensive pipeline network of over 16,000 km provides a significant competitive advantage and a stable revenue stream through transmission tariffs.
• Favorable Industry Growth Outlook: The company is well-positioned to benefit from the Indian government’s policy to increase the share of natural gas in the energy mix to 15% by 2030 from around 7% currently. This policy is expected to drive substantial growth in natural gas consumption, particularly in the City Gas Distribution (CGD) and industrial sectors.
• Significant Capex Plans to Drive Future Growth: GAIL is undertaking substantial capital expenditure, with plans to invest around ₹30,000 crore over the next three years in pipelines, petrochemicals, and CGD projects. A major ₹60,000 crore ethane cracker project in Madhya Pradesh is also planned, which will significantly boost its petrochemical capacity and future earnings potential.

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