Ajcon Global IPO report on Divgi Torqtransfer Systems
Divgi TorqTransfer Systems (“DTTS”) was incorporated on December 16, 1964. The Company is amongst the very few suppliers in India who have the capability to develop and provide system level transfer case, torque coupler and DCT solutions. The Company is one of the leading players supplying transfer case systems to automotive OEMs in India and the largest supplier of transfer case systems to passenger vehicle manufacturers in India. The Company is also the only player manufacturing and exporting transfer cases to global OEMs from India, and the only manufacturer of torque couplers in India. The Company also has the capability to develop and provide transmission systems for electric vehicles (“EVs”). The Company is in the process of designing and developing prototypes of transmission systems for EVs pursuant to receipt of a business award for this purpose. As on the date of the Red Herring Prospectus, the Company has been awarded a contract for the supply of EV transmission systems for one of the leading providers of EVs in India. However, supply pursuant to this contract has not started as on the date of the Red Herring Prospectus.
Valuation and Outlook
At the upper end of the price band of ₹590, the Company's IPO is valued at P/E of 35.16x at H1FY23 Diluted Annualised EPS and at a P/E of 39.1x which we believe is reasonable considering the opportunity in the sector and strong fundamentals of the Company. We recommend investors to "SUBSCRIBE" the issue due to the following factors.
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