India Nippon Electricals Limited (INEL) is a leading manufacturer of ignition systems for two-wheelers, three-wheelers, and portable engines. Established in 1985, the company was incorporated in 1984 and later converted into a joint venture in 1986 between Lucas Indian Service Ltd (a wholly-owned subsidiary of Lucas-TVS Ltd) and MAHLE Electric Drives Japan Corporation (Japan), a company of the MAHLE Group. INEL maintains a strong technical collaboration with Mahle Electric Drives Japan Corporation, focusing particularly on the two-wheeler industry.
The company boasts a developed Research & Development centre, recognized by DSIR, Government of India, which complements the support received from its collaborators. India Nippon Electricals operates three manufacturing facilities in India: one each in Hosur (Tamil Nadu), Pondicherry, and Rewari District (Haryana). These facilities cater to both domestic and overseas markets. The company's shares were listed on the National Stock Exchange (NSE) in 1997 and subsequently on the Bombay Stock Exchange (BSE) in 1999.
INEL specializes in manufacturing vital electronic ignition systems for two-wheelers, portable gensets, and three-wheelers. Its comprehensive product portfolio includes:
- Electronic Ignition Parts: Flywheel magnetos, capacitor discharge ignition (CDI) units, ignition coils, integral units, and regulators/rectifiers.
- Modern Electronic Ignition Systems: These systems replace conventional mechanical ignition in older vehicles, ensuring precise ignition of the air-fuel mixture for enhanced combustion efficiency and power generation.
- Electronic Control Units (ECUs) and Modules: Designed to manage and regulate various vehicle systems.
- Sensors: A wide range of sensors installed throughout vehicles to monitor critical operating conditions, including Throttle Position Sensor (Rotary type), Oil Level Sensor, Coolant Temperature Sensor, Air Temperature Sensor, Temperature Sensor, Differential Pressure Sensor, Crankcase Ventilation Sensor, and Side Stand Sensor.
Key products in INEL's portfolio include Flywheel Magneto, Engine Control Unit, Ignition Coil, Regulator Rectifier, Converter, Governor Control Unit, Immobilizer, and Body Control Module.
Through its dedicated centre in Tamil Nadu, India Nippon Electricals focuses on developing EV technology products crucial for emission control and compliance. The company designs mechatronic products integrated with advanced software solutions for a wide range of applications. INEL has successfully developed an electronic control unit (ECU) for electronic fuel injection (EFI) systems.
In 2024, the company commenced the supply of Flywheel Magneto (FWM) systems for premium model export bikes, demonstrating its expanding global reach. Furthermore, it initiated the export of DC-DC converters, marking another significant step in its international market expansion.
India Nippon Electricals became a subsidiary of Lucas Indian Service Ltd (LIS) effective March 30, 2022. During the fiscal year 2022-23, LIS increased its stake by acquiring 1,414,786 equity shares from Mahle Electric Drives Japan Corporation (MEDJ) and 3,000,000 equity shares from Mahle Holding India Private Limited (MHIPL). Following these acquisitions, LIS's shareholding increased to 70.32% effective June 19, 2023, solidifying its control over the company.
India Nippon Electricals holds a market capitalization of ₹1,755 crores. The company reported an operating revenue of Rs. 844.83 crores on a trailing 12-month basis. It has demonstrated an outstanding annual revenue growth of 17%, surpassing the industry average. The pre-tax margin stands at a healthy 12%, with a good Return on Equity (ROE) of 11%.
- Q3 FY2024-25: Net profit rose 32.12% to Rs 15.96 crore, compared to Rs 12.08 crore in Q3 FY2023-24. Sales increased by 20.02% to Rs 214.67 crore, against Rs 178.86 crore in the previous year's corresponding quarter.
- Q2 FY2024-25: Net profit rose 20.64% to Rs 21.16 crore, compared to Rs 17.54 crore in Q2 FY2023-24. Sales grew by 10.62% to Rs 209.85 crore, against Rs 189.70 crore in the previous year's corresponding quarter.
- P/E Ratio: 21.3
- Book Value: ₹314
- Dividend Yield: 1.62% (Current)
- ROCE (Return on Capital Employed): 15.4%
- ROE (Return on Equity): 12.3%
- Face Value: ₹5.00
The company has significantly reduced its debt and is now almost debt-free, indicating a strong balance sheet capable of supporting stable earnings growth across various business cycles.
India Nippon Electricals has announced an interim dividend of Rs 12.50 per share (of Rs 5 fully paid up) for FY 2024-25, with the record date fixed as February 21, 2025. The dividend is scheduled to be paid on or before March 14, 2025. The current dividend yield is 1.73%.
The 52-week low for India Nippon Electricals share price was Rs. 545.3, and the 52-week high was Rs. 867. While the stock exhibits strong quality and technical aspects, its current valuation is considered medium to expensive. It is suggested that potential investors observe opportunities carefully before making buying decisions.
India Nippon Electricals has a dedicated team focused on strengthening its brand image, expanding its product range, and enhancing sales promotion efforts within the aftermarket segment. Over the last five years, the company's revenue has grown at a yearly rate of 6.78%, compared to the industry average of 8.38%.
The company continues to prioritize innovation and expansion within the automotive electronics segment. A particular strategic focus is on the rapidly growing electric vehicle (EV) market and the ongoing development of advanced ignition systems for conventional vehicles. India Nippon Electricals Limited stands as a prominent player in the automotive electronics industry, underpinned by a strong foundation in ignition systems manufacturing and a forward-looking strategy toward emerging EV technologies. Its debt-free status, consistent dividend payments, and robust technical collaborations position it favorably for future growth in the evolving automotive landscape.
