![]() ![]() It's no surprise to discover the growing proliferation of these cameras in a vehicle (the image below gives you a sense of the growing omnipresence of these objects), given the role they play in functions such as lane detection, night vision, occupant monitoring, surround view, blind spot detection, automated parking etc. In March 2023, INDI took another step forward in making this offering more compelling by completing the acquisition of Geo Semiconductor, an entity that specializes in video processing capabilities for automotive cameras and already enjoys established commercial relationships with over 20 Tier 1 suppliers. ![]() A more well-rounded and fluid sensor fusion offering (combining all these sensors) can play a stellar role in analyzing environmental conditions and making effective decisions during navigation. INDI has ambitions of playing a vital role in enabling the uncrashable car, but to get there, one needs a comprehensive offering that adroitly utilizes and combines the capability of various sensors, such as LiDAR (Light Detection and Ranging), RADAR, ultrasonic, and cameras. ![]() YCharts GEO Semiconductor acquisition enhances INDI's positioning in the auto tech market Based on the FY24 revenue figure, the stock only trades at a forward P/S of 2.9x, a 17% discount to the historical forward P/S average multiple. In light of strong visibility, and these heady top line forecasts for the foreseeable future, we feel that INDI's price-to-sales multiple comes across as very cheap. Given this, INDI will likely witness whopping top-line growth of 125% in FY23 (estimated sales figure of $249m), with sales poised to more than double and hit levels of $560m in two years' time! As of November 2022, the backlog stood at an impressive $4.3bn, more than 2x as much as what was seen in FY20-$2bn. Normally, given the strong base, you would expect some slowdown in the growth potential, but such is the scope of growth in this market. INDI looks well-poised to profit from this trend, even as it focuses on churning solutions that could cater to three of the highest growth applications in the auto industry- Electrification, User experience, and Safety systems (ADAS).Īlready we’ve seen INDI demonstrate solid revenue growth numbers over the last three years, revenue has grown at an impressive CAGR of 70%, and since its listing date nearly two years back, the revenue has surged by 5x (also note that the quarterly revenue has continued to make sequential progress for seven straight quarters)! Quite unlike the norm a decade or so ago, these days, most car consumers across the major global auto markets tend to give greater precedence to features, safety, and on-board electronics, rather than the performance of the vehicle.ĭeloitte 2023 Global Automotive Consumer Study We are bullish on the INDI stock, and here are the three key reasons which buttress our long thesis Strong growth potential leaves a mark on forward valuations Put another way, INDI can be considered a decent enough proxy to play the growing auto tech revolution. ( NASDAQ: INDI), is a small-cap stock that offers automotive-based semiconductor and software solutions that are leveraged by tier-1 vendors and then deployed by some of the leading auto manufacturers around the world (see image below). Choochart choochaikupt/iStock via Getty Images Introduction ![]()
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