Uniparts is a global manufacturer of engineered systems and solutions. It is one of the leading suppliers of systems and components for the off-highway market in agriculture and construction, forestry and mining, and aftermarket sectors with presence in over 25 countries. It is a concept-to-supply player for precision products for off-highway vehicles with presence across the value chain.
The product portfolio includes core product verticals of 3-point linkage systems and precision machined parts, adjacent product verticals of power take off, fabrications and hydraulic cylinders or components.
The world market for 3-point linkages was estimated at USD 360 million in 2021 and is expected to grow at nearly 6% to 8% between 2021 - 2026, aided by growth in tractor production volumes in North America, India and Europe, steady growth in China and Japan. The global market of PMP for articulated joints was an estimated USD 648 million in 2021. As per CRISIL report, the demand for such products is expected to grow at a healthy 6% - 8% CAGR in the 5-year period between 2021 - 26.
Strengths And Risks
+ Leading market presence:: Uniparts is a leader in the manufacture of 3PL and PMP products globally and serves some of the largest global companies, including Bobcat, TAFE and Yanmar. They are present in key markets incl. North and South America, Europe, Australia, Japan and India. Uniparts had 16.68% market share of the global 3PL market in Fiscal 2022 and 5.92% market share in the global PMP market in the CFM sector.
They have also forayed in construction equipment market with customers such as Kobelco.
+ Engineering driven precision solutions provider: Uniparts provides comprehensive solutions and manufactures high-quality, critical products and components for OHV industry. Most of the products are critical, structural and load bearing parts of equipment and are subject to strict tolerances and specifications. A series of precision engineering process steps are required to manufacture these products.
+ Competitive business model: Uniparts has grown their global business model in a scalable manner, optimized to provide premium-priced local deliveries manufactured on-shore in smaller lots and with shorter lead times, as well as cost-competitive offshore deliveries from India with longer lead times and inventory cycles.
+ Long-term relationships: Co has long term connects with key global customers, major OEMs, resulting in a well-diversified revenue base. Four of their top five customers have been with them for over 10 years. TAFE and Kramp are some of the customers with relationships for over 15 years, while with customers like Yanmar, we have developed relationships for over 10 years.
+ Strong Operational & FInancial Performance: The revenues from operations were ? 9,072.20 million, ? 9,031.42 million, ? 12,274.24 million, and in Fiscal 2020, 2021 and 2022. The restated profit for the year was ? 626.42 million, ? 931.47 million, ? 1,668.87 million, a steady growth in revenue and profitability.
- Customer Concentration: Significant part of Unipart’s revenue comes from a limited no. of customers. Any loss of customer or customer’s business downturn can impact revenue and profits.
- Forex risk: Unipart has its business spread across the globe and involves currency exchange. Any fluctuations in currencies can impact the net revenue and profit.
- Availability and cost of raw materials: Any changes in supply and cost of raw materials e.g. steel, power and fuel can impact the business operations.
- Cyclical Impact: The business can be impacted by cyclical effects in the global and domestic economy, specifically in the agriculture and CFM sectors. Further, business may also impacted by tractor production volumes globally.
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