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Companies impacted by the Japanese turmoil
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5 min read | Updated on August 07, 2024, 10:53 IST
SUMMARY
Japan raised interest rates, which has spooked the markets. In this article, we look at companies that have a relationship with Japan and the impact on their performance over the past two trading sessions.
List of companies impacted by recent volatility in Japan
This prompted us to make a list of impacted companies. The impact could come because the domestic company has borrowed in Japanese currency, has Japanese promoters, a certain portion of their revenue comes from Japan, among others.
Let’s take a look at this list and the impact on share price over the past two trading sessions (August 5-6, 2024). Please note, the list is non-exhaustive and the stocks mentioned are selected based on the size, intensity of impact, and availability of data. .
Companies with Japanese promoter
| Name | Connection with Japan | Market Cap (in ₹ crore) | Last two-day returns % |
|---|---|---|---|
| Maruti Suzuki | Suzuki Motor Corp has a ~58% stake; Paid around 3-4% of revenue as royalty to the promoter; ~15-16% of raw materials are sourced from Japan | 3,83,461.2 | -4.4 |
| Samvardhan Motherson International | Promoter Sumitomo Wiring Systems has a ~10% stake | 1,18,871.1 | -9.0 |
| Hitachi Energy | Promoter Hitachi Corporation has a ~75% stake | 49,128.7 | -8.9 |
| Nippon Life India Asset Management Ltd | Promoter Nippon Life Insurance has a ~72% stake | 38,014.4 | -5.6 |
| Motherson Sumi Wiring | Promoter Sumitomo Wiring Systems has a ~25% stake | 30,983.3 | -2.0 |
| Sumitomo Chemicals | Owned by Sumitomo Group; Derives 4% of its revenue from Japan | 24,616.6 | -2.9 |
| Asahi India Glass | Promoter Asahi Glass has a ~20% stake | 14,837.1 | -1.5 |
| JTEKT India | Promoter Jtekt Corporation has a ~70% stake. Indian company paid ~5% of revenue promoter as royalty | 4,778.2 | -7.7 |
| Honda India Power Products | Promoter Honda has a ~67% Stake | 4,014.1 | 0.4 |
| SML Isuzu | Promoter Sumitomo Corporations has a ~44% stake | 2,922.4 | -5.5 |
| Lumax Industries | Promoter Stanley Electric has a ~38%; Royalty paid: ~1.25% of its revenue | 2,629.1 | -3.5 |
Source: Company’s annual reports, press releases, investor presentations, NSE, Bloomberg.
Companies with JV / strategic deals
| Name | Connection with Japan | Market Cap (in ₹ crore) | Last two-day returns % |
|---|---|---|---|
| JSW Steel | JV with JFE Steel to manufacture green steel in India by investing around ₹ 5,500 crores. Also borrowed money in Yen-denominated bonds. | 2,11,168.4 | -2.0 |
| Dixon Technologies | JV with Rexxam to manufacture electronics. | 66,678.5 | -4.7 |
| Uno Minda | Signed a deal with Tachi-S for the sale of its products | 55,975.6 | -4.6 |
| Aether Industries | Agreement to supply to Otsuka Chemical | 11,511.7 | -4.2 |
| Shriram Pistons | Has 4 long-standing partnerships with 4 auto companies | 8,078.6 | -7.0 |
| Rain Industries | JV automobile company NSK | 5,433.3 | -6.6 |
| Neogen Chemicals | Announced Japan foray into by forming Neogen Chemicals Japan | 4,165.5 | -4.5 |
| Fiem Industries | Significant presence in Japan - R&D and design centre; JV with Toyota | 3,392.5 | -5.6 |
| Mukand | JV with Sumitomo Corporation | 2,370.1 | -11.7 |
Source: Company’s annual reports, press releases, investor presentations, NSE, Bloomberg.
Companies with revenue exposure
| Name | Connection with Japan | Market Cap (in ₹ crore) | Last two-day returns % |
|---|---|---|---|
| KPIT Technologies | Revenue exposure is ~10% | 47,288.2 | -7.4 |
| Nava | Revenue exposure is ~5% | 12,514.2 | -2.3 |
| Ion Exchange | Revenue exposure is ~22% | 9,698.1 | -6.5 |
| Azad Engineering | Revenue exposure is ~37% | 9,213.4 | -4.6 |
| Anupam Rasayan India | Revenue exposure is ~16% | 8,595.2 | -1.1 |
| Sudarshan Chemicals | Revenue exposure is ~5% | 6,339.1 | -4.5 |
| Hikal | ~7% of its exports are to Japan | 3,876.1 | -5.7 |
| Uniparts India | Revenue exposure is ~5% | 2,240.5 | -2.8 |
Source: Company’s annual reports, press releases, investor presentations, NSE, Bloomberg.
Companies that have Japanese borrowings
| Name | Connection with Japan | Market Cap (in ₹ crore) | Last two-day returns % |
|---|---|---|---|
| NTPC | Collectively (also including JSW mentioned above), these companies have borrowed ~₹10,000-11,000 crore in yen | 4,00,762.4 | -1.4 |
| PFC | 1,64,237.7 | -9.8 | |
| REC | 1,52,502.5 | -7.3 | |
| HUDCO | 58,142.3 | -6.8 |
Source: Company’s annual reports, press releases, investor presentations, NSE, Bloomberg.
What does it mean for these companies?
Expectedly, the last two days have seen some price correction in each of these names. That said, we would not raise an alarm right now. Investors should evaluate these companies on their own fundamental merits before taking any decision.
If all else is fundamentally sound, such short-term hiccups could provide an entry point.
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