Overview
Kinetic Engineering was the company behind Luna Motorcycles. If you ask your Grand Parents or Parents then they will tell you about this Brand of Scooters. It was instant hit that time and is proud moment for this Company.
It was unable to utilize the first mover advantage and did not capitalize the market. Now it has converted itself into Auto Ancillary Company.
It now manufactures more than 151 Auto Components which can be divided into three categories.
- It manufactures Gear Shafts and Gearboxes.
- It manufactures Small Engines up to 400 cc
- It manufactures and assembles moped, motorcycles, ATV and Lawn movers
The Customers of this Company are
- Tata Motors – Creates Transmission gears for Winger, Gearbox for LCV and main shaft for Sumo product range
- Force Motors – Speedo shaft for Trax, Gearbox
- Carraro – Axle and Transmission parts
- Mahindra – Cylinder head and Gear
- MV Agusta-Cagiva – Aluminum frame and Engine
- Tomos – Engine assembly and Frames for Hip Hop Mopeds
- GKN Rockford – Slip Yokes for off highway applications
- Husqvarna-Electrolux – Muffler assembly for Lawn movers
Stock Performance
Above is long term price performance of the Stock. As you can see investors have lost money in this counter. Last few years were not good for Auto Stocks and that has also played a part as well.The stock is trading at all time low as of this writing.
My Opinion
Auto Ancillary sector is in all types of bad news. This sector is going through rough patch due to lower sales in Automobile industry as well as Electric vehicle adoption.
The Company has once manufactured most popular Moped of its time but is unable to capture the market with new products or innovation. It does have experience and knowledge due to success of Luna. We have seen Bullets making a comeback in recent years and helped Eicher Motors ride the success it has.
As of now Company has opted for Auto Ancillary and the transition is not without hiccups. It has under performed over the years as per the long term price chart above.
I would track this Company closely for any improvement in financials and areas it explores. Companies which have produced market topper products once should be tracked as they may innovate and come up with surprise. These are perfect candidate for turn around stories but once should keep an close eye.