Multibase India Ltd -the beginning of a new beginning ?

I had written about Multibase India Ltd about 20 months back. The stock has gone nowhere in the interim period.

The link to old post :

http://libraryequity.blogspot.in/2011/02/multibase-india-ltd-sound-growth.html

Maruti Suzuki announced the launch of the Alto 800 two days back. In what can be construed as a path breaking move, the company has given the buyers of the top end version a choice to opt for company fitted Driver Air bag at an additional cost.

We might see, most other car manufacturers too following suit and offering the Driver seat Air bag option for the Micro ( A) & Mini ( A1) segment cars too.

Annual Car sales in India are approximately about 25 lakhs.Though there are no confirmed official figures available, it is expected that not more than 3.5 to 4% of the cars sold are with Airbags.

Of the total car sales mentioned above, the Micro & Mini segment sales are about 8 lakhs. Assuming over a period of time, even 4-5% of the buyers in this segment opt for the Air bag option, it should provide a decent impetus to Multibase India’s revenue growth.

A key point to bear in mind is that Multibase India currently operates at 1/3^rd of installed capacity.

Total staff strength is about 45 which includes 10 shared services staff for their business process outsourcing service for the parent and group companies.  Production staff number is about 15 and even to scale up the production to 2 times or 3 times the current utilization should not require an addition of more than 10-12 production staff. So the scale economy benefits shall not be insignificant.

At the time of writing this report, the author /his family have an investment interest in the stock mentioned above. Under no circumstance does the information in this report represent a recommendation to buy or sell the above-mentioned stock.  This report has been prepared and issued on the basis of publicly available information, internally developed data & other sources believed to be reliable. This is just a suggestion solely for information purposes and does not constitute a solicitation to any person to buy or sell a security. While the information contained therein has been obtained from sources believed to be reliable, no responsibility (or liability) is accepted for the accuracy of its contents. Readers using the information contained herein are solely responsible for their actions and are advised to satisfy themselves before making any investments.