Hello Sir,

Hope you are doing well.

You must have surely heard of terms like BS-IV and BS-VI, but have you heard of terms like RDE, TREM-V?


Recently, I was going through the details of Sharda Motor Industries which commands 30% market share in exhaust systems in passenger vehicles/LCV segment.

From the con-call, I learnt about TREM V emissions standards and RDE norms which will open up opportunities for the company in the Tractors, PV and the CV segments.

Below, we have shared our notes from the Q3 FY 23 con-call transcript of Sharda Motor. Hope you find them useful for your own investments or to add the stock to your watch list:


Before that, some good news for medium-long term investors

Individual investor participation in shares dropped to 34 months low in Jan'23. Google trends - Multibagger chart also indicating low investor interest

To know why this is good news if your investment horizon is 3-4 years - Click HERE


Sharda Motor - Notes from Q3 FY 23 con-call


General Points

  • We have two competitors, an American and a French Company. These are the main competitors. There is no significant domestic player in our product line (exhaust systems in emission)
  • Our market share is different across different segments, but a rough guesstimate could be 30% (PV/LCV)
  • In our standalone number it is PV and LCV. So, as a revenue split about 90% comes from exhaust, 6% from suspension and others is about 4% and when we look deeper into the exhaust numbers, roughly 45%-50% is PV and 50%-55% is CV which is LCV
  • The M&HCV segment does not come in our standalone results that comes in the JV results
  • Most of the OEMs are preparing for all powertrain scenario and one of them is CNG and we are actively working with almost all of our customers for the CNG platforms also and it is likely to be neutral when it comes to switch over to CNG if it happens

EV segment

  • In the case of the lithium-ion battery business we are simply assembling the batteries into packs right now. It is in pre-revenue stage and we have a joint venture along with Kinetic Green
  • As per the joint venture agreement we will begin the activity of simply assembling the batteries as well as the BMS and providing it to them as Phase-1

Eberspaecher JV (for M&HCV)

  • We are just about coming into profitability right now
  • We are working with the OEMs to make all our products modular so that they can go into the old engine, new engine and then the mix will not have such an impact
  • We have the approval that we can utilize them modularity wise and in terms of that we have kickstarted the development work
  • In principal we are working with our customers to cross utilize our products for commercial vehicles across engine families

Growth drivers for next few years

  • First one the emission vertical there are multiple legislations that are coming up in the next 2-3 years. Number one being RDE BS-VI-II which starts on 1st Apr'23. This will increase our content per car, LCV, etc.
  • On product side content should probably increase by 10% in gasoline and roughly 20%-25% in diesel. So, depending on the mix and also the information of RDE on how customer sales go there would be a little bit of an upswing in terms of RDE numbers
  • In addition, TREM-IV and TREM-V norms are coming. TREM-IV norms have already started, TREM-V norms are going to start in the next couple of years and in the case of TREM-V market the entire domestic tractors will also require our emission products
  • It is a large opening for the company from an addressable market point of view and in this case we are expecting a very solid market share and we have already been nominated for lot of programs here
  • In TREM-V roughly all the tractors will require our product and we would be participating in the full market for TREM-V
  • The next growth driver is of course on the sub-component side. So, we have started this initiative to export sub components as well as emission systems for smaller engines

Balance sheet

  • It is Rs 588 crores including cash, cash equivalent and bank balances


  • We expect similar margins going forward as well, but no specific numbers that we will give out as guidance



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Disclaimer: This is not a recommendation to buy/sell Sharda Motor Industries. These notes are as announced by the companies on exchanges and only for the purpose of information and education.


Best Regards,

Ekansh Mittal
Research Analyst
Web: https://www.katalystwealth.com/


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