Content

  1. 1Simpson and Company Limited Essentials
    1. 1.1 Simpson and Company Limited ISIN
    2. 1.2 Simpson and Company Limited Face Value
    3. 1.3 Simpson and Company Limited Total Share
    4. 1.4 Simpson and Company Limited Total Income
    5. 1.5 Simpson and Company Limited Profit After Tax
    6. 1.6 Simpson and Company Limited Promoter Holding
    7. 1.7 Simpson and Company Limited EPS
    8. 1.8 Simpson and Company Limited P/E
    9. 1.9 Simpson and Company Limited P/B
    10. 2.0 Simpson and Company Limited Market Capitalisation
    11. 2.1 Simpson and Company Limited Enterprise Value
    12. 2.2 Simpson and Company Limited Book Value
    13. 2.3 Simpson and Company Limited Intrinsic Value
    14. 2.4 Simpson and Company Limited Earnings Yield
    15. 2.5 Simpson and Company Limited Dividend Yield
    16. 2.6 Simpson and Company Limited Sector
    17. 2.7 Simpson and Company Limited Sub-sector
    18. 2.8 Simpson and Company Limited Category
    19. 2.9 Simpson and Company Limited Cashflow - Operations
    20. 3.0 Simpson and Company Limited Cashflow - Financing
  2. 2Simpson and Company Limited Growth
    1. 2.1 Simpson and Company Limited Compounded Sales Growth
    2. 2.2 Simpson and Company Limited Compounded Profit Growth
    3. 2.3 Simpson and Company Limited Return On Equity
  3. 3 About Simpson and Company Limited
  4. 4 Simpson and Company Limited IPO Details
  5. 5 Simpson and Company Limited Funding
  6. 6 Simpson and Company Limited Merger & Acquisition
    1. 6.1 Simpson and Company Limited Merger
    2. 6.2 Simpson and Company Limited Acquisition
    3. 6.3 Simpson and Company Limited Investments
  7. 7 Simpson and Company Limited Subsidiaries
  8. 8 Simpson and Company Limited Business Model
  9. 9 Simpson and Company Limited Revenue Segmentation
  10. 10 Simpson and Company Limited Product & Services
  11. 11 Simpson and Company Limited Assets
  12. 12 Simpson and Company Limited Industry Overview
    1. 12.1 Simpson and Company Limited Industry Statistics
    2. 12.2 Simpson and Company Limited Future Prospects
    3. 12.3 Simpson and Company Limited Government Initiatives
  13. 13 Simpson and Company Limited Awards & Achievements
  14. 14 Simpson and Company Limited SWOT
    1. 14.1 Simpson and Company Limited Strengths
    2. 14.2 Simpson and Company Limited Shortcomings
    3. 14.3 Simpson and Company Limited Opportunities
    4. 14.4 Simpson and Company Limited Government Threats
  15. 15 Simpson and Company Limited Rating
  16. 16 Simpson and Company Limited Detail Info

Simpson and Company Limited Essentials

Here in this research report, you will get:
- Simpson IPO Review and Analysis
Simpson Pre IPO Details

Simpson Upcoming IPO Details
- Expected 
Simpson Upcoming IPO Date
- Expected Price Band
- Management Details (Ownership)
- Business Model
- Key Ratios
- Peer Comparisons
- Financial reports (Profit and Loss Statements, Balance Sheets, Results, 
Growth, Valuations, Funding Rounds)

- Latest News (Articles and Videos)
- Upcoming and Past Events Details
- Rating and recommendations for the Company's shares (Whether to Buy/Sell/Hold)

Simpson (Latest in Pre IPO Market)


Discover and get a complete analysis on Simpson and Company Limited - Management, Business Model, Financials, Growth, Valuations, Funding Rounds, News and get the latest updates on Simpson Share Price.

ISIN

INE01W301018

Face Value

₹2,500.00

Total Share

29,479

Total Income

₹13,459.66 Cr

Profit After Tax

₹1,691.52 Cr

EPS

₹4,60,105.96

P/E

8.49

P/B

0.85

Market Capitalisation

₹11,511.55 Cr

Enterprise Value

₹14,109.04 Cr

Book Value

₹45,67,624.41

Intrinsic Value

₹47,86,472.00

Dividend Yield

0.48 %

Earnings Yield

11.78 %

Sector

Consumer Discretionary

Sub-sector

Auto Parts

Category

Mid Cap

Cashflow - Operations

₹832.38 Cr

Cashflow - Financing

₹201.27 Cr

Simpson and Company Limited Growth

Compounded Sales Growth

  • 8.74%

    1 Year

  • 4.88%

    3 Year

  • 6.37%

    5 Year

Pro Only

Compounded Profit Growth

  • -5.13%

    1 Year

  • 13.38%

    3 Year

  • 11.76%

    5 Year

Pro Only

Return On Equity

  • 12.56%

    2022

  • 7.74%

    2020

  • 12.51%

    2018

Pro Only

About Simpson and Company Limited

  • Simpson & Company Limited, is primarily involved in manufacturing of Diesel Engines for Agricultural, Industrial, Power generation and marine applications and is the preferred choice in the 10 – 100.5 hp range for agricultural, industrial, power generation and marine applications. Along with that, it is also involved in manufacturing of paints for domestic and industrial applications.
  • Simpsons is a unit company of Amalgamations Group involved in manufacturing, trading & services, plantations having 46 companies and 52 manufacturing plants
  • Simpson & Co was founded in 1840 by Mr A.M. Simpson & Mr Hide to engage in a business in “coach-building, harness and boot making” and emerged as the leading coach manufacturing outfit in India.
  • In 1955, Simpsons was the first Indian company to indigenously manufacture diesel engines for surface transport vehicles. In the first decade of the 20th century, Simpson entered the “motor car business”, by building bodies on car chassis for manufacturers such as Rolls Royce, Hotchkiss and Napier
  • The company operates an unlisted company, headquartered in Chennai, incorporated on 02 Feburary,1925. 
  • On 25 September 2019, the Board of Directors approved the proposal to consolidate the share capital into shares of a larger amount by increasing the nominal value of the shares from Rs.10 to Rs.2,500 per share so that every 250 shares with nominal value of Rs.10 held by a member are consolidated into 1 share with a nominal value of Rs. 2,500. Any fractional shares arising from such consolidation will be compensated by consideration paid to the shareholders entitled at Rs.14,860 per share for each fractional share.
  • To safeguard the interest of those who are in the dissenting minority category, who would otherwise not be willing to accept the price of Rs 14,860 per share offered by the company in consideration of cancellation of their shares and reduction, the company shall facilitate constituting a Trust in which the fractional shares shall be vested for benefit of the dissenting shareholders.  

  • Simpson and Company Limited IPO Details

Currently, company has no intention to launch IPO.

  • Simpson and Company Limited Merger & Acquisition

Acquisition

Information related to Subsidiaries

Name of the subsidiaryPrincipal ActivityDate of Acquisition
Addison & Company Limited
Manufacture of Metal Cutting Tools
30-Apr-57
Amalgamations Repco Limited
Manufacture of Auto ancillary parts
01-Aug-89
AMCO Batteries Limited
Manufacturing and Trading of Industrial and Automobile Batteries
30-Apr-57
George Oakes Limited
Trading of Automobile parts and spares 
30-Apr-57 
India Pistons Limited & Subsidiaries
Manufacture of Auto ancillary parts 
30-Apr-57

Shardlow India Limited

Manufacture of Crank Shaft
19-Dec-61 
Simpson & General Finance Company Limited
Non Banking Finance Company
01-Feb-38
Sri Rama Vilas Service Limited
Trading of Auto parts and Transportation services
30-Apr-57 
Tractors & Farm Equipment Limited & Subsidiaries
Manufacture of Tractor and related parts
27-Dec-61 
T. Stanes & Company Limited & Subsidiaries
Manufacturer of Agro products
01-Oct-64
Wheel & Precision Forgings India Limited
Manufacture of Auto ancillary parts
30-Apr-57
Stanes Amalgamated Estates Limited
Tea Estate
31-Mar-83
IP Rings Limited 
Manufacture of Auto ancillary parts
24-Feb-17


  • Simpson and Company Limited Subsidiaries

Subsidiaries:

  1. Addison & Co. Ltd
  2. Amalgamations Repco Ltd.
  3. Amco Batteries Ltd.
  4. George Oakes Ltd.
  5. India Pistons Ltd.
  6. I.P. Rings Ltd.
  7. Shardlow India Ltd.
  8. Simpson & General Finance Co. Ltd.
  9. Sri Rama Vilas Service Ltd.
  10. Tractors and Farm Equipment Ltd.
  11. TAFE Access Ltd.
  12. TAFE Reach Ltd.
  13.  Southern Tree Farms Ltd.
  14.  TAFE Motors & Tractors Ltd.
  15. ALPUMP Ltd
  16. TAFE International Traktor VE Tarim Ekipmani Sanayi VE Ticaret Limited Sirketi
  17. TAFE Tractors Changshu Company Ltd., China
  18. TAFE Advanced AG Solutions Ltd.
  19. TAFE Properties Limited
  20. Vidagara Techpark Private Limited
  21. T.Stanes & Company Ltd.
  22. Stanes Motor (South India) Ltd
  23. Stanes Amalgamated Estates Ltd.
  24. Wheel & Precision Forgings India Ltd. 

Associates:

  1. Amalgamations Valeo Cluch Pvt. Ltd.
  2.  Bimetal Bearings Ltd.
  3. L.M. Van Moppes Diamond Tools India Pvt. Ltd.
  4. The United Nilgiri Tea Estates Company Limited
  5. IPL Shaw Solutions Private Limited.

Joint Ventures:

  1. BBL Daido Pvt. Ltd.

Simpson and Company Limited Business Model

Simpson's Subsidiaries, Associates and Joint Ventures are primarily involved in manufacturing of tractors, diesel engines, automobile parts, plantation products, non-banking finance and dealership in passenger cars and parts. 
  • Simpson and Company Limited Revenue Segmentation

  • Diesel Engines and Spare Parts
  • Traded Goods
  • Rendering of Services
  • Others
  • Simpson and Company Limited Product & Services

Simpson & Co. has 60 years of experience in engine manufacturing. The company works with manufacturers in diverse areas such as Agricultural, Industrial, Power generation and Marine applications. Simpsons offer a range of five series in Engines - "SC Series", "S Series", "SJ Series", "SJV Series", "S440 Series".


    Engines

    • Agricultural

    In land where 80% of the economy is agrarian, farm mechanism is the key driver for agricultural growth. Simpsons is a pioneer in introducing diesel engines in 1960 for farm mechanization in India and since then it has played a key role in helping the customers till the soil and haul there produce for 6 decades now. Simpsons produces a wide range of engines from 8-100.5 hp. .

    • Industrial

    In all day to day activities of lifting, breaking rocks, mixing concrete, earth-moving, safeguarding lives, Simpsons Industrial Engines deliver performance, dependability and operating economy at optimal efficiency.

    • Power Generation

    Hospitals, Theatres, Restaurants, shopping malls, Remote unmanned locations wherever Simpsons generate the power, generate the value for Consumer and their business. More products are under development for offering a comprehensive range of products between 5 -82.5 kVA range.

    • Marine

    With rich experience in engines and better understanding on Customer needs, Simpsons is able to offer a comprehensive solution to Fishing Boats, Passenger Ferries, Tourism boats. One of the models S325 has earlier approved for SOLAS, a stringent rule to qualify for “Safety of Life at Sea” by Lloyds Register of Shipping.

    • Retail

    These engines can be used in  applications like Pumpsets to Hullers, Crushers in dusty environments. Simpsons offer the engines with standard scope of supply  for retail sales and are available in Simpsons D2c retail outlets for ready usage.


    Spare Parts

    Simpsons’ engine parts are comprehensive & diverse – the range includes cylinder heads, crankshafts, cylinder blocks, connecting rod assembly, water pump & lube oil pump assembly, cylinder liners, rocker assembly, pulley, inlet and exhaust valves. The company has 5 branches in South India and 170 dealers across India. It also has a global market presence to ensure easy availability of spares. It extends spare parts warranty period for some of its major components to encourage usage of genuine parts.


    Paints

    ADDISONS PAINTS & CHEMICALS LIMITED (APC) is a part of Simpson & Co. Ld. and was established in 1948. The company commenced its manufacturing activity to cater to their demands in collaboration with Hardie Trading Limited, Australia, and marketed products under brand names SPARTAN and TROJAN.

  • Simpson and Company Limited Assets

Assets as on 31st March 2022 

Total AssetsAmounts in Rs(Cr.)
Long Term Investments8,709
Property, Plant and Equipment1,757
Short term Marketable Securities2,848
Trade Receivables1,419
Inventory1,439
Cash & Cash Equivalents395


  • Simpson and Company Limited Industry Overview

Industry Statistics

Engine Market Overview:


According to the type of fuel used, the engines are classified into three categories:

  • Petrol Engine: The petrol engine uses petrol for its running. Petrol or gasoline is a hydrocarbon, made up of hydrogen and carbon compounds. Air-petrol mixture is sucked into the cylinder during the suction stroke of the piston. The correct air-petrol mixture is obtained from the carburettor. The mixture is compressed during the compression stroke, ignited during the power stroke and the exhaust gases pushed out during the exhaust stroke. A spark plug is fitted at the top of the cylinder which gives a spark to ignite the mixture.
  • Diesel Engine: In these types of engines, diesel oil is used for its running. Diesel oil is light, with low viscosity and high cetane number. In the diesel engine, only air is sucked into the cylinder during the suction stroke and compressed to high pressure, the compression ratio is as high as 22:1. Its temperature also rises by about 1,000°F.The diesel oil is injected by an injector at the end of the compression stroke which catches fire and burns due to the high temperature of the compressed air. No separate ignition system is required. The burnt gases expand pushing the piston down during the power stroke and finally, the gases are pushed out during the exhaust stroke.
  • Gas Turbine: A gas turbine essentially consists of two sections-a gasifier section and a power section. The fuel used in a gas turbine can be gasoline, kerosene, or oil. The gasifier section burns fuel in a burner and delivers the resulting gas to the power section, where it spins the power turbine. The power turbine then turns the vehicle wheels through a series of gears.The gasifier consists of a compressor which has a rotor with a series of blades around its outer edge. As the rotor rotates, the air between the blades is carried around and thrown out by centrifugal force into the burner. Thus air pressure rises in the burner. The fuel is injected in the burner where it burns and further raises the pressure.


As Simpson and Company ltd. is primarily into the business of manufacturing diesel engines, so our primary focus will be on Diesel engine market.


Diesel Engine Market Segment Analysis:
  • Based on the Operation: The Diesel Engine Market is segmented into Standby, Prime /Continuous, and Peak Shaving. The Standby segment held the largest market share, accounting for 47.1% in 2021. Standby Diesel Engines are generally used for emergency power supply. In the event of a power outage from the grid, the consumer can temporarily rely on diesel-powered gensets to meet demand. The Characteristics of standby diesel engines, such as quick-start capability, the low starting cost of diesel engine driven generators, and absence of large scale commercially viable alternatives for backup power supplies are making standby diesel engines the most preferable choice among other types, as a result, diesel engine market is growing with the significant growth rate for this segment.

                                                          

  • Based on the Application: the Diesel Engine Market is segmented into Industrial, Commercial, and Residential. The Commercial segment held the largest market share, accounting for 34.2% in 2021. The Industrial sector includes mining, construction, agriculture, Hospitals, Datacenter, and manufacturing, which consumes the largest share of energy consumption among the end-use sector. The growing demand for constant and reliable power supply from these end-users is driving the diesel engine market growth for this segment. A noteworthy growth of the automobile industry across the globe, especially in the Asia Pacific region is driving the diesel engine market growth. The Diesel engine provides better fuel efficiency as compared to other fuels including petrol and gasoline engines are making them most preferable and usable in the commercial and heavy vehicle industry.

                                                         

Diesel Engine Market:.
  • From 2021 to 2026, the market share for global diesel engines is anticipated to grow at a CAGR of 3.16% and reach an estimated value of USD 37.45 billion.
  • With a 63% global market share throughout the forecast period, APAC will overtake other regions as the dominant market for diesel engines.  

                                            


Growth Drivers:

The key industries that find engine applications are automotive, power generation, marine, agriculture gensets, construction, off-road equipment and other commercial vehicles. Therefore, it is crucial to comprehend an outline of these industries.


Power Generation:

One of the most important sectors for India's economic development is the power sector. The increasing frequency of natural disasters that result in power outages makes the usage of standby generators necessary. The Indian diesel genset market size estimated at $937.1 million in 2022, and it is expected to advance at a compound annual growth rate (CAGR) of 8.8% during 2022–2030, to reach $1,839.5 million by 2030.. The rise of specialty retail, warehouse facilities, and the manufacturing sector's rising energy needs are projected to increase market opportunities for generators. As of 2021, significant volumes of diesel generators was generated from the range 5kVA-75kVA and Simpson and company offers products between the same range.

                                                      

                                              

                                                                                                             

Industrial engine business:

A major force behind the industrial engine industry is infrastructure. The infrastructure sector focuses on important infrastructure areas like urban infrastructure, highways and bridges, and power. Therefore, the business of industrial engines will expand as infrastructure does.

  • In the next five years, India intends to invest US$ 1.4 trillion in infrastructure through its "National Infrastructure Pipeline."
  • Housing for All by 2022 will require India to build 43,000 homes per day until that time. Under the Pradhan Mantri Awas Yojna scheme, 62.21 lakh houses have been finished as of August 22, 2022, 103.01 lakh houses have been grounded, and 122.69 lakh dwellings have been sanctioned.
  • The demand for urban freight is expected to rise by 140% during the following ten years.
  • By the end of 2027, the global Industrial Engines market is estimated to have grown at a CAGR of 3.9% from 2021 to 2027.


Agricultural:

India is among the largest manufacturers of farm equipment like tractors, harvesters and tillers. India accounts for nearly one-third of the overall tractor production globally. To boost farmer incomes and growth of the agricultural economy, the Indian government released funds in June 2021 for farm mechanization such as establishment of custom hiring centers, farm machinery bank and high-tech hubs in different states. Agriculture and allied activities recorded a growth rate of 3.9% in FY 2021-22 and is expected to grow from USD 858 Billion in 2021 to USD 1714 Billion by 2027, exhibiting a CAGR of 12.3% during 2022-2027.

                                               

                                                                                                


Marine

India's marine engine market, which in volume terms accounted for more than 13,000 units in 2019, is expected to rise over the next five years due to rising ship production and repair activity as well as expanding exports to other nations. The availability of reputable marine engine producers and commercial shipping firms in India is also boosting the need for marine engines in the nation. The market can be divided into diesel, gasoline, and other fuel types. Due to their greater efficiency in terms of fuel economy and lower price than petrol engines, diesel engines held the highest market share in terms of volume in 2019. The market is divided into four categories based on power: 5 to 75 HP, 76 to 350 HP, 351 to 750 HP, and above 751 HP. Due to the building of larger ships and boats, which require high power engines, the 351-750 HP power segment took the lead in the India marine engines market in 2019. Simpson and company offers their diesel engines in the range 10-100.5 hp.


Competitive landscape: 

Diesel Engine market is a fragmented market i.e. there is no clear leader within the industry and none of the player have enough market share to influence prices, production, investment and their competition.


Peers:

  • Cummins India ltd. and Kirloskar Oil Engines ltd. are amongst the peers.
  • As of FY22, Cummins India ltd. has a market share of 7.5% and Kirloskar Oil Engines ltd. has a market share of 4.9%.

                                                    

Future Prospects

                                                              

Outlook:

  • The need for diesel engines in the country will continue to rise as a result of initiatives like the $100 billion Delhi-Mumbai industrial corridors, which are planned to be finished by 2040 and will cover the development of 8 industrial hubs.
  • The industry is primarily being propelled by APAC's (Asia Pacific regions) rising demand for diesel engines.                                                     
  • Diesel engines are used as a key source of electricity, the India Diesel Engine Market is predicted to experience significant expansion over the following years.
  • The expansion of the diesel engine market in India is also being aided by the rising use of engines in the construction, agriculture, automotive, and industrial sectors. Tractors, cars, generator sets, trucks, diesel locomotives, and construction machinery are examples of major application equipment.
  • The need for diesel engines in the nation has been significantly impacted by increased export activities and cab facilities, and as a consequence, potential manufacturers can anticipate a favorable future for their businesses in the market in the years to come.
  • The deployment of diesel engine equipment in agriculture and farm machinery, such as diesel tractors, is increasing, ensuring efficient farming, and is predicted to boost the India Diesel Engine Market Growth in the ensuing six years.

Government Initiatives

Some of the recent government initiatives and investments are as follows:


  • The government has given a massive push to the infrastructure sector by allocating Rs. 10 lakh crore (US$ 130.57 billion) to enhance the infrastructure sector.
  • The government allocated Rs. 134,015 crore (US$ 17.24 billion) to National Highways Authority of India (NHAI).
  • The government announced an outlay of Rs. 60,000 crore (US$ 7.72 billion) for the Ministry of Road Transport and Highways.
  • The government announced Rs. 76,549 crore (US$ 9.85 billion) to the Ministry of Housing and Urban Affairs.
  • The government allocated Rs. 84,587 crore crore (US$ 10.87 billion) to the Department of Telecommunications to create and augment telecom infrastructure in the country.

  • There will be a rise in demand for farm equipment due to government programmes like the Pradhanmantri Krishi Sinchai Yojana, which aims to enhance irrigation coverage across the country and decrease reliance on the monsoon season.

  • The total revenue expenditure by Railways is projected to be Rs. 234,640 crore (US$ 30.48 billion)
  • 100 PM-GatiShakti Cargo Terminals for multimodal logistics facilities will be developed over next three years.
  • In August 2022, Mr. Nitin Gadkari, Minister of Road Transport and Highways laid foundation stone of six NH projects worth Rs. 2,300 crore (US$ 287.89 million) in Indore, Madhya Pradesh.
  • In June 2022 Mr. Nitin Gadkari, Minister of Road Transport and Highways inaugurated 15 National Highway projects in Patna and Hajipur in Bihar worth Rs. 13,585 crore (US$ 1.75 billion)
  • From 2017 to 2020, India received ~US$ 1 billion in agritech funding. With significant interest from the investors, India ranks third in terms of agritech funding and number of agritech start-ups. By 2025, Indian agritech companies are likely to witness investments worth US$ 30-35 billion.


Simpson and Company Limited Strengths

  • Strong promoter Amalgamations Private Ltd., which owns 98.19% of the company, is backing Simpson and Company.
  • The company is undervalued since its PE ratio is lower than that of its competitors.
  • Established a good market share in a highly competitive market.
  • Company has a wide customer base and no customer contribute to more than 10% of the business to the group.
  • Company's cash conversion cycle is better than the industry average, which means that it takes less time for the company to convert its investments in inventory and other resources into cash flows from sales.

Simpson and Company Limited Shortcomings

  • Company has delivered a lower ROCE as compared to its peers in FY22 due to increase in raw materials. 
  • Exposure to volatility in raw material prices and intense competition.
  • Inclination to cyclicality in end-user industries.

Simpson and Company Limited Opportunities

  • In India, the 5kVA-75kVA power rating segment held the biggest market share as of 2021, and the country's genset market is anticipated to expand at a CAGR of 8.8%. With a range of goods between 5-82.5 kVA, Simpson and Company Ltd. will greatly benefit from this.

Simpson and Company Limited Threats

  • Market share of the company has decreased from 19% to 16.3%.
  • Despite the current dominance of diesel fuel engines, the growing popularity of solar power and electric vehicles poses a danger to diesel engines. In the mining, agriculture, and construction sectors, the market for electric vehicles might reach $100 billion a year.
Simpson and Company Limited Rating

  • RECOMMENDATION

    Buy

  • Simpson and Company Limited Detail Info

Industry Statistics

PUBLIC LIMITED

Registered In

India

last Updated

25/01/2023

Registered Date

02/02/1925

Planify Ticker

SACL

Reg Office: 861/862, ANNA SALAI, CHENNAI – 600 002

Visit Website