Bonfiglioli Transmissions Ltd

The company is the Indian arm of Italy’s Bonfiglioli group and makes gear motors, gearboxes and drive systems for factory equipment, off-highway machines and wind turbines. It leads all three of its segments in India, with a 25% share in low and medium duty gear motors, 26% in off-highway drives and 68% in wind turbine yaw and pitch drives (as per F&S data). Products are co-developed with OEMs over up to 30 months, and customers such as Suzlon and JCB have stayed for 15 to 20 years. Its governance gives us comfort. Much of the value, though, sits with the Italian parent, which owns the technology and brand, and a large part of revenue is tied to cyclical wind and off-highway demand. At a rich 40.6x TTM P/E, the valuation leaves limited margin of safety, and we would track the company after listing.