Interview transcript of Mr. Jitendra Adhia, VP Finance. Company seem to be on course to grow at 20-25% for at least couple of years.
Hello Ayush,
I saw your post, which pointed that the Working capital of the company has turned negative. However I have computed the Working capital requirement (WCR) for FY12 & FY 13 and find the figure to be 17.71 cr & 5.45 cr respectively. I have used this equation to arrive at these figures WCR = (Inventories+receivables+prepaid exp)-(payable+accrued exp+advance from customers). There are other provisions and other current liabilities on the BS, but I haven’t taken them as I believe they are not part of WCR. Can you please explain on how you have got a negative WCR figure.
Regards,
Chetan Chhabria
Atul Auto Ltd.____
invites you to a post result conference call____
to discuss the Q3FY14 financial result**____**
onMonday, 03rd February, 2014 at 05:00 p.m. IST____
with____
Mr. Niraj Chandra â Whole time Director____
Mr. Jitendra Adhia â Vice President (Finance)____
____
Access Numbers:____
Single India Number:1800 425 4249____
Mumbai Local Access Number:(022) 3300 2300
**
Thanks a lot Rajeev for this.
Any source which can gives con-calls dial-in & time details for all the companies?
Tough to call all companies & ask for details every quarter…
Atul Auto Ltd. call result**____**
**
Atul Auto announces sales figures for January 2014.
| MONTH | 2013-14 | 2012-13 | GROWTH % |
| JANUARY | 3330 | 2808 | 18.60 |
| APRIL-JAN | 31238 | 26400 | 18.33 |
Tony
Some very basic but important questions like Why are you gaining market share & what are plans for next 2-3 yrs were answered in today’s concall.
Would recommend the concall to investors & potential investors!!
Stock is trailing at about 11 times PE & looks cheap even now with good growth, good ROCE & good opportunity size…
Hi Jatin,
Agree with you. In addition, for me another key take away was that the Co. could increase plant capacity of 48,000 units at the existing plant by 15-20%.
Rajeev
Hi All,
Atul Auto Concall - some Notes.
¼ No of Dealers : 179
¼ Petrol Model will be launched in a quarter or Two.
¼ 40% business from Gujarat and Rest 60% from 14 Cities.
¼ Yet to receive the approval for Srilanka operation.
¼ We have not taken any price hike
¼ Business Split ( 60% passenger and balance cargo)
¼ Large Competitor ( Piaggio , Mahindra and Scooters India )
¼ Capacity Utilization : Around 80%
¼ Margin will be stable for next couple of quarters . Looking at expanding margin in the long run ( Better utilization and Exports )
¼ Atul Product price are at par with the competitor . 2 Year warranty is given for new Vehicle. Finance arrangement done with various vendor .
¼ New plant will be operation around Fy 16. ( 50 k to 60 K capacity ).
¼ At least for Next few years the focus will be only in 3 Wheeler.
¼ No big technological changes in required for Next 4-5 Years time .
¼ No price differentiation in diff states .
¼ Next 3-5 years the co is expected to grow 20 â 25 %.
| Niraj J Chandra, Whole Time Director, and J V Adhia, VP Finance took the queries .
Key Points of the call by Capital Mkt: The Company sold 10,764 vehicles during Q3 FY 2013-14 in compared to 9,173 vehicles in Q3 FY 2012-13, showing YoY growth of 17%. The Sales revenue surged to Rs 122.89 crore in Q3 FY 2013-14 as compared to Rs 103.31 crore in Q3 FY 2012-13, YoY growth of 19%. The operating EBITDA during the quarter grew by 20% to Rs 15.83 crore for Q3 FY 2013-14. The Profit before tax during the quarter jumped by 21% to Rs 14.42 crore for Q3 FY 2013-14. The Profit after tax during the quarter grew by 17% to Rs 9.66 crore for Q3 FY 2013- 14. The scenario where the automobile sector is passing through is the decade's worst slowdown. The market has remained challenging. Unstable situations across the country and vehicle financing options have been the main reasons for weak growth. Until M&HCV shows growth, slowdown in 3 wheeler industry will continue. In the 4Q FY 14, the company plans to maintain the growth momentum. For the introduction of petrol 3 wheeler, the particular evaluation under technical team is going on and will be introduced in another couple of quarter's time. There are 179 dealers as of date. Atul Auto is targeting to have pan India presence and cover 250 dealers by next year. 45% of sales are coming from Rajastahan and Gujarat. Sales do not come from Tamilnadu and West Bengal. Rest of sales come from 13-14 other states. No plans for price hike in immediate future. Regarding Sri Lankan project, the company is yet to receive the permission from govt. Cargo segment of 3W has been stagnant for past 3-4 years. It will bounce back as it is last mile connectivity Volume wise breakup of Atul Auto is 60% from passenger vehicles and 40% is cargo vehicles. Scientifically it is 7 years life span for a three wheeler cargo vehicle. But depends on use and abuse of the product. At this point time, company is in spending mode, over medium to long term, margin will improve once the scale of volumes improve. The company increased capacity from 24K to 48K units at beginning of the year at capex of Rs 10 crore. Its working at 80% utilization. Has room for further 15-20% expansion in that plant. New plant will be operational by FY 16. It will have capacity between 50K to 60K units. Total capex for the project will be around Rs 100 crore. In current FY, the company expects 20% growth for itself, and so it plans to close FY 14 with sales of 40K units. In FY 15, the company plans to do 50K units in sales. The company buys tyres from MRF and CEAT. Little bit of dilution of equity by promoters in the quarter was totally for personal requirement and there is no other intention. They are likely to maintain this level. In next 2-3 years time, the brand of the company will be seen all across the country. |
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Thanks Balaji and Hemant for taking the trouble of sharing the concall details.
Looks business as usual - in a relatively tough environment.
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Hello Balaji,
Thanks for the call details. Where can I get the full details of the call. Want to go through this in full detail.
Regards,
Chetan Chhabria
Hi Chetan,
There is no concall transcript . I have covered widely the entire call.
With regards
G R Balaji
For the purpose of WC, I was looking at inventory + receivables - trade payables - advance from customers.
The concalls are available at researchbytes.com
Hello Ayush,
How about competition from these cheap Chinese electric rickshaws. Costs about 1.2 lakhs, a single charge lasts 100 km,
Hello Vimal,
I think these will not be a threat to ATUL. The average realization for ATUL was 1.14 Lac last year. However I do not have the figures for individual products. ATUL also gives 2 year warranty for its products which no other auto maker gives in the market today. Additionally after sales service of ATUL will be better than the chinese rickshaws. There will also need to be charging stations for these auto’s as I think auto’s must be doing more than 100 km a day.
Regards,
Chetan Chhabria
Hi Chetan,
Please allow me to elaborate:
- **Refueling: **I agree with your view partly. I assume they use cheap batteries that would need to be charged overnight.So far they only ply short distances, but I expect we would see chai-wallahs and dhabas allowing them to tank-up sometime in the future. Or we might see user-replacable batteries.
- **After-sales: **This would be a big issue. The Toyota Prius has this problem in the US where not many mechanics know how to fix it. The cheaper ones we talk about here might have a simpler design and I guess maybe easier to fix. Indian companies are starting to get into this :http://www.saeraelectricauto.com/
- **Legal issues: **Tripura is probably the only place where they are legal, allowing people easier access to loans to buy them. They will probably get popular long before they get legal.
- Operational costs: To quote from the article "Worst affected are the cycle-rickshaws, as customers are showing a distinct preference for the new kid in town, which can accommodate up to six passengers, all for a mere â¹5 each.Debnathâs daily earnings range between â¹400 and â¹500, more than the average auto-rickshaw operator. The best part is that his expense is as little â¹20 a day, on electricity, to charge the battery.
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I think the larger issue is the adoption of electric vehicles, and that this might happen faster than most people expect. Companies like Atul might have to create new models and new capacities to capture this market. Also earlier CNG-based designs might become obsolete. With slower legislative response, we might not get the subsidies or create tariff-barriers to prevent cheap Chinese imports.
| Particulars | Fy14 | Fy13 | Growth |
|---|---|---|---|
| Sales for feb | 3105 | 2610 | 18.97% |
| YTD sale | 34343 | 29010 | 18.38% |
Sales for Feb are out. Atul auto continues with around 20% growth even in such a somber environment. I think this stock can post good upsides this year.
This article appeared in the Eco Times on 28th Feb.
Recently while in Cochin, Kerala we came across news from 3wh vehicle loan financiers that Kerala market there is a big problem. Sales of 3Wh had halved to 3500 vehicles/month from over 7500 vehicles/month. 3wh owners that were earning Rs 850/- a day were down to Rs 450/- day. Vehicle owners ability to service the debt has come down drastically. NPAs were bad. 5% gross NPA levels vs 1% NPA fro 2 wh.
The above tells its own story. Couple this with the additional info they supplied that the Kerala 3 Wheeler Owners Association has written to manufacturers asking them not to approve fresh loans - as that might adversely impact current situation!
A quick look at Atul Auto data confirms the declining trend
|
Zone |
Sales (in lacs) |
No. of Dealers |
Qty of Vehicle Sold |
Contribution |
||||||||
|
2010-11 |
2011-12 |
2012-13 |
2010-11 |
2011-12 |
2012-13 |
2010-11 |
2011-12 |
2012-13 |
2010-11 |
2011-12 |
2012-13 |
|
|
West Zone |
10,865.83 |
15,575.05 |
20,530.83 |
51 |
47 |
54 |
11,102 |
14,890 |
18,923 |
56% |
54% |
58% |
|
South Zone |
5,134.04 |
5,868.07 |
5,438.71 |
37 |
41 |
31 |
5,043 |
5,397 |
4,891 |
26% |
20% |
15% |
|
East Zone |
1,919.02 |
3,700.85 |
5,256.76 |
15 |
22 |
29 |
1,851 |
3,372 |
4,661 |
10% |
13% |
15% |
|
North Zone |
1,200.02 |
3,380.84 |
3,744.56 |
13 |
21 |
29 |
1,145 |
3,039 |
3,316 |
6% |
12% |
11% |
|
Export |
309.44 |
367.06 |
305.96 |
5 |
3 |
6 |
263 |
302 |
249 |
2% |
1% |
1% |
|
TOTAL |
19,428.35 |
28,891.87 |
35,276.82 |
121 |
134 |
149 |
19,404 |
27,000 |
32,040 |
100% |
100% |
100% |
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