𝗧𝗛𝗘 𝗖𝗔𝗣𝗘𝗫 𝗧𝗛𝗘𝗠𝗘 — 𝟭𝟳 🏭 𝗝𝗧𝗘𝗞𝗧 𝗜𝗡𝗗𝗜𝗔 CMP: ₹113 Market Cap: ₹3,140 Cr A 40-year-old steering parts maker has spent ₹918 Cr on expansion in just three years. Yet a fifth of its balance sheet is still tied up in unfinished plants. Even its CFO has told investors to keep watching this number. 🏭 𝗧𝗛𝗘 ₹𝟵𝟭𝟴 𝗖𝗥 𝗖𝗔𝗣𝗘𝗫 🔹 Sixth manual gear line at Dharuhera, lifting capacity from 28 to 32 lakh units 🔹 Third power steering line, raising capacity from 10 to 15 lakh units 🔹 Second CVJ line, taking driveline capacity to 7.5–8 lakh units 🔹 Fourth manual gear line at Chennai, built for a Brazil export order 🔹 New Gujarat plant — ₹250 Cr committed, construction due by early 2028 🔹 ₹400 Cr still in unfinished plant, around one-fifth of total assets JTEKT India makes steering systems and driveline components used in vehicles from Maruti, Toyota, Tata and Mahindra. Most new production lines were commissioned over the past year. Gujarat is the major project still ahead. The CFO's message to analysts was clear: keep watching capital work in progress (CWIP), as it will continue affecting financial ratios for another year or two. 📈 𝗧𝗛𝗘 𝗕𝗨𝗦𝗜𝗡𝗘𝗦𝗦 𝗜𝗦 𝗘𝗫𝗣𝗔𝗡𝗗𝗜𝗡𝗚 The transformation goes beyond steering gears. 🔹 Constant velocity joints, with a 15% market-share aspiration 🔹 Brazil exports through a dedicated Chennai production line 🔹 US exports, benefiting from tariffs falling from 50% to 10% 🔹 Electric power steering as vehicle models move away from manual systems JTEKT already supplies the Grand Vitara, Hyryder, e Vitara and Victoris, with a fifth model being added. 💰 𝗖𝗔𝗣𝗘𝗫 𝗛𝗔𝗦 𝗦𝗨𝗥𝗚𝗘𝗗 FY24: ₹195 Cr FY25: ₹279 Cr FY26: ₹444 Cr That's roughly 4.5× annual depreciation. Borrowings rose from ₹156 Cr to ₹340 Cr, while free cash flow fell to −₹343 Cr. A ₹249 Cr rights issue helped fund the expansion, with JTEKT Corporation Japan and Maruti Suzuki subscribing in full. 🎯 𝗪𝗛𝗔𝗧'𝗦 𝗡𝗘𝗫𝗧? The next 12 months are about utilisation: 🔹 Complete the remaining ₹100 Cr of the Gujarat project 🔹 Lift CVJ utilisation from 27% as Maruti's third EV model arrives 🔹 Start Brazil supplies from the Chennai export line 🔹 Fill Bawal's power steering lines, currently around half utilised 🔹 Rebuild US exports following the tariff reduction Management expects recently commissioned capacity to add around ₹1,000 Cr in revenue by FY27, compared with FY26 revenue of ₹2,666 Cr. FY27 capex is also expected to be lower, as most production-line setup is complete. 📊 𝗧𝗛𝗘 𝗡𝗨𝗠𝗕𝗘𝗥𝗦 🏷️ 34% below its 52-week high of ₹171 Over 10 years: 9% Sales CAGR 17% Profit CAGR 11% revenue growth in FY26 The company has expanded steering, power steering and driveline capacity simultaneously. But returns have yet to catch up. Operating margin is around 8%, falling to 5.3% in the June quarter. Profit is flat over three years, ROE is 8%, and the stock trades at roughly 41× earnings. 🔄 𝗧𝗛𝗘 𝗖𝗔𝗣𝗘𝗫 𝗦𝗧𝗢𝗥𝗬 The sequence is straightforward: 𝗖𝗔𝗣𝗘𝗫 → 𝗡𝗘𝗪 𝗟𝗜𝗡𝗘𝗦 & 𝗣𝗟𝗔𝗡𝗧𝗦 → 𝗛𝗜𝗚𝗛𝗘𝗥 𝗨𝗧𝗜𝗟𝗜𝗦𝗔𝗧𝗜𝗢𝗡 → 𝗥𝗘𝗩𝗘𝗡𝗨𝗘 𝗚𝗥𝗢𝗪𝗧𝗛 → 𝗣𝗢𝗧𝗘𝗡𝗧𝗜𝗔𝗟 𝗠𝗔𝗥𝗚𝗜𝗡 𝗜𝗠𝗣𝗥𝗢𝗩𝗘𝗠𝗘𝗡𝗧 Most production lines are ready. The gap is utilisation: CVJ capacity is at 27%, the Chennai export line has yet to start, and Bawal is only about half utilised. Now the focus shifts from building capacity to filling it. 𝗖𝗔𝗣𝗘𝗫 𝗖𝗬𝗖𝗟𝗘 → 𝗖𝗔𝗣𝗔𝗖𝗜𝗧𝗬 𝗨𝗧𝗜𝗟𝗜𝗦𝗔𝗧𝗜𝗢𝗡 → 𝗕𝗨𝗦𝗜𝗡𝗘𝗦𝗦 𝗘𝗫𝗣𝗔𝗡𝗦𝗜𝗢𝗡 That's the part I'm tracking. Educational purposes only. Not a buy/sell recommendation. ❤️ Like | 🔁 Repost | 🔖 Bookmark | 🔔 Follow 𝗖𝗔𝗣𝗘𝗫 𝗧𝗛𝗘𝗠𝗘 — 𝟭𝟳 More companies from the CAPEX cycle coming next.