I attended Atul Auto’s AGM and am sharing my notes below. Questions are highlighted in bold.
1. Its impressive to see growth in spares and e-rikshaw sales. Congrats on that. Coming to our core operations, can you give a split between diesel vs non-diesel vehicles in overall volumes and our plans to grow non-diesel volumes?
Sales composition for Atul Auto is in-line with industry (SIAM figures are 27% diesel + 60% alternate fuel + 9-10% EV)
For Atul auto, alternate fuel 3-wheeler accounts for 57% of FY22 sales. Sold 9336 alternate fuel vehicles in FY22 vs 2697 in FY21. Were late in seeding the market
2. How much of our current sales are from CNG vehicles?
55-60% of total sales (present in both 0.35 and 0.5 ton segments)
3. In the past, we used to share a sales breakup across different models. Is it possible to share the same for FY22 and FY21?
Get in touch with IR to get this data
4. We reached peak sales volume of 5500+ in export markets in FY19. However, this has come down to 1605 in FY22. However, our competitors like Bajaj auto and TVS have not seen such large de-growth. Can you talk more about this?
Exports have picked up in FY22 and is picking up month on month. Currently in seeding phase and getting some repeat orders. Africa has a volatile economy, monthly numbers may not give exact scenario. Expecting higher volume in FY23 vs FY22. In long term, expect exports to contribute 20-25% to overall sales
5. When do we plan to start selling EV 3W? It seems that despite having a strong distribution base and our own manufacturing, a lot of start ups have taken the lead.
Currently selling L3 category (lead acid battery powered) 3-wheelers. Right comparison is with L5 vehicles which will be launched in a couple of quarters. For fixed battery vehicles, batteries will be manufactured by Atul Greentech. For swappable batteries, have tied up with Honda and batteries are currently under trial
6. We used to have 200 primary and 130 secondary dealers until FY18. Have we ramped up our dealer network and how many dealers do we have now?
More or less this no remains the same
7. Can you talk more about our NBFC operations. What are the NPAs in this business, and do we exclusively finance our own vehicles?
Khusbu is exclusively funding Atul 3-wheelers (70% of book). Also funding 2-wheelers and LAP. Have seen stress in the 3-wheeler segment and restructuring loans where there is a potential of money coming back. Pre-covid book is still not out of woods and should run off by FY25. Portfolio built after 2nd COVID wave is performing well
In terms of capital adequacy, Khusbu is adequately financed and company does not have plans to infuse further capital in FY23. Will come back with fresh plan with pickup in growth
Have tie-ups with regional and national NBFCs (M&M, IndusInd bank, Hinduja Finance, AU Small bank, IDFC First bank, regional NBFCs like Kanakdurga Finance)
8. Our stock price continues to trade at very low valuations. Any thoughts of management on value un-locking?
Focusing on improving business
Breakeven nos: keeps on fluctuating and do not disclose
Long term debt: 75 cr. (expansion from Bayla plant). Total capex including maintenance was ~250 cr. with 75 cr. coming from long term debt and rest from internal accruals
Preferential allotment to Vijay Kedia (Atul Greentech): Atul Greentech has 12.5 cr. long term debt and 3.5 cr. working capital term loan. Will roll out commercial production in near term
Marketing team: different person for each geography
Disclosure: Invested (position size here, no transactions in last-30 days)