Mehabe score: 5 G Factor: 2 Piotski Score: 5 The stock has a rating OBSERVE & HOLD. The mehabe team score is reflective of its fundamental and technical merits. A rating above 8 is considered good buy. The stock has a G-Factor of 2 and Piotski score of 5.
Description
Automotive Axles was established in 1981 as a JV of Kalyani Group (35.5% ownership) and Meritor Inc, USA (35.5% ownership). [1]
The Company is engaged in the business of manufacturing and supplying Automotive Parts to the major domestic and global manufacturers of Trucks & Buses (LCV, MCV, HCV, Military & Off-highway Vehicle Segment).Site:AUTOAXLESMain Symbol:AUTOAXLES
Stock trades at 1421.0, above its 50dma 1268.64. It also trades above its 200dma 1166.55. The stock remains bullish on techicals
The 52 week high is at 1565.00 and the 52week low is at 646.00
Price Chart
P/E Chart
Sales and Margin
Strengths
– is almost debt free.
– is expected to give good quarter
– has been maintaining a healthy dividend payout of 26.38%
Weakness
– The company has delivered a poor sales growth of -3.57% over past five years.
– has a low return on equity of 12.01% for last 3 years.
-Debtor days have increased from 75.30 to 113.66 days.
Competition
– The industry trades at a mean P/E of 23.6x. WABCO India trades at the industry’s max P/E of 94.49x. AUTOAXLES trades at a P/E of 38.8x
– Industry’s mean G-Factor is 2.9 while the mean Piotski score is 7.0. AUTOAXLES has a G-Factor of 2 and Piotski scoreof 5.
– Average 1 month return for industry is 4.4%. The max 1- month return was given by Endurance Tech.: a return of 14.16 %
Quarterly Results
Sales for period ended Sep 2021 is Rs 309.0 cr compared to Rs 169.0 cr for period ended Sep 2020, a rise of 82.8%
Operating Profits reported at Rs 22.0 cr for period ended Sep 2021 vis-vis 9.0 for period ended Sep 2020 .
Operating Margins expanded 179.4 bps for period ended Sep 2021 vis-vis Sep 2020 .
The EPS for Sep 2021 was Rs 6.71 compared to Rs 3.69 for previous quarter ended Jun 2021 and Rs 3.98 for Sep 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 1261.0 cr for period ended TTM vis-vis sales of Rs 906.0 cr for the period ended Mar 2021, a healthy growth of 28.2%. The 3 year sales cagr stood at -13.4%.
Operating margins expanded to 9.0% for period ended TTM vis-vis 7.0% for period ended Mar 2021, expansion of 200.0 bps.
Net Profit reported at Rs 55.0 cr for period ended TTM vis-vis sales of Rs 23.0 cr for the period ended Mar 2021, rising 58.2%.
Company reported a poor Net Profit CAGR of -23.3% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The company has worsened on its Return on Equity (RoE) metric. The RoE on Last Year basis was 5.0% compared to 12.0% over the last 3 Years. – The stock has given a return of 98% on a 1 Year basis vis-vis a return of 4% over the last 3 Years. – The compounded sales growth on a TTM bassis is 133% vis-vis a compounded sales growth of -16% over the last 3 Years. – The compounded profit growth on a TTM basis is 1967% vis-vis a compounded profit growth of -33% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Sep 2021 fii holding stood at 0.83% vis-vis 0.66% for Jun 2021 – Public shareholding has remained largely constant. The Sep 2021 public holding stood at 14.49% vis-vis 13.96% for Jun 2021
Conclusion
– is almost debt free.
– is expected to give good quarter
– has been maintaining a healthy dividend payout of 26.38% – The company has delivered a poor sales growth of -3.57% over past five years.
– has a low return on equity of 12.01% for last 3 years.
-Debtor days have increased from 75.30 to 113.66 days.
Fundamentally, the stock remains weak on business fundamentals. Weak near term results have dampened and questioned business drivers. We suggest to wait for a upturn in business performance.
Technically, the stock trades above its 50 DMA 1268.64 and is trading at 1421.0 It has shown near term bullish momentum contrary to business fundamentals. We suggest to observe price action. However as investors, who like to avoid timing the markets, we suggest to avoid the stock
