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Commercial Engineers & Body Builders IPO Analysis and Review – Bad Management,Negative Cash Flows and Super Expensive Valuation

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Commercial Engineers and Body Builders (CEBBCO) is an Auto Ancillary Company involved mainly in building Bodies of Commercial Vehicles (CVs).The Company builds Truck Bodies for CV OEMs like Tata Motors,Ashok Leyland and others.It competes mainly with the unorganized sector in building bodies on CV Chassis which are sold by OEMs.The Company is Diversifying into Railways Supply by building a factory to supply wagon and wagon parts to the Indian Railways.The company is another one trying to take advantage of the current Indian Market Bull Run.The Management is not particularly of the highest quality with its only listed company failing to meet Stock Exchange Requirements.The Management has a number of Criminal and Civil Cases against them as well.Here are some of the features of this company

1) Bad Management with Chequered History – Management has been involved in criminal intimidation,tax cases etc.The Promoter Group’s only other listed company has failed to meet stock listing requirements.A Number of Group Companies are Defunct.The list goes on and on showing that the Management Quality is not good.Investors should avoid this stock just on this basis

2) Expensive Valuation – Despite Negative Cash Flows for 3 out  of the last 5 years,Cyclical Industry and Customer Concentration Risk,the Management wants around 35x P/E Valuation for their company.This is quite amazing as I would not consider the company a Buy at even 20x.However even shadier and crappier issues have managed to listed.Prakash Steelage,Aster Silicates are all examples of investors trying their hand at such Junk.

3) Customer Concentration –  The Company is dependent on a few customers like Tata Motors and Indian Railways for most of its revenues.Competition for supplying Wagons to Indian Railways has increased drastically with even State Owned Companies joining the fray.CV is a cyclical industry and margins in the CV Body Building Business are nothing great.The Company has failed to show consistent margins in the business


This is one of the more crappier issues to hit the market.Investors should not be even considering subscribing to the issue given the bad management history,cyclical sector and competition.Margins are nothing great.Growth has been inconsistent and the stock is overvalued even at half of its asking price.


Sneha Shah

I am Sneha, the Editor-in-chief for the Blog. We would be glad to receive suggestions, inputs & comments on GWI from you guys to keep it going! You can contact me for consultancy/trade inquires by writing an email to

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