it is expected to be 20%on yoy basis
right now P/E IS CONTRACTED TO LESS THAN 10.
BUY MAY BE INITIATED BETWEEN 180 TO 185 LEVEL.
Sales (In numbers) for the month of February 2013
Is up 3.9% to 2610 from 2511 Y-o-Y but Down 7.1% from 2808 M-o-M.
There were 10% less days in Feb compared to Jan, and hence lower sales
yoy growth of 3.9% is low. some signs of slowing downbut too early to conclude though.
IF we add three more days, total sales would have been 2889 and that would be up 3% M-o-M.
When the whole sector is being affected by slowdown it is only a matter of time before the small players are also caught by slowdown.
Till now the numbers used to look good because of lower base effect. Now onwards it would have a tough climb unless there is sectoral revival.
I think we need to be cautious, watchful and curb our enthusiasm.
In the last qtrly concall, management had mentioned that they will keep up the growth in the current qtr as well, I doubt it, under the circumstances, Hitesh bhai is right, one needs to be cautious here, as a little bit of -ve news and the mkt starts beating the stock price right and left, especially small and midcaps.
[quote="Donald, post:203, topic:582050293"]
> Ayush had prompted a dose of realism a few days back. Here are some collated numbers for everyone to reflect on.
>
> Monthly Sales Volumes
> ---
[/quote]
Another way to look at Feb 13 growth is- Feb 12 was very high at 2511 units against an average of 2000 for FY12.So even 3% isn't bad.
Also 2511 was very high if we at month-wise breakup of 2012 as posted by Donald.
| Atul Auto | 2013E | 2012 | % growth |
| Apr | |||
| May | |||
| June | |||
| July | |||
| Aug | 2322 | 2051 | 13.21% |
| Sep | 2727 | 2511 | 8.60% |
| Oct | 3332 | 2520 | 32.22% |
| Nov | 2997 | 2286 | 31.10% |
| Dec | 2844 | 2360 | 20.51% |
| Jan | 2808 | 2371 | 18.43% |
| Feb | |||
| Mar |
I fully agree with Hitesh that when the leading players are facing pressure on sales, its only a matter of time that Atul too may face the slowdown, If overall market does not recover it might be quite difficult for Atul to sustain past 12 months performance for next 12 months. Moreover, lets be very clear that after all Atul is a cyclical play [atleast as far as I am concerned]. Lastly many times its not the valuation which matters but the expectations of large number of investors who have bought the stock. When most of the investors expect sales growth of 15-20% and if the company sales growth gets stuck at 5-10%, stock will correct sharply. I am not suggesting that correction may happen or sales may slow down, but we should consider it as a cyclical play which is better to buy at cyclical slowdown and to sell at peak of the cycle or start of slowdown rather than holding as a core position in oneās portfolio. So as Howard Mark say we cannot predict the cycle but we should be aware about the current cycle and take bet accordingly.
Disc: No position
PS: BTW, last month I went to Kumarkaon and I saw passenger Autoās from Atul and some other players too like Mahindra. Even Tataās seems to have come up with a new model which looks like Nano and canaccommodatemore passengers.
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Atul is looking at a smaller vehicle for the export market and an entry into Africa on the lines of Sri Lanka. The plans might take time to materialize and given that these are new markets, risk is high. On the positive side, the management is good and they are looking for growth opportunities.
Bajaj auto 3W sales down by 2% for Feb-13. Here is what they have to say for next 1-2 quarters āThe targets for next quarter and the next year are also very hazy, given the sluggish domestic growth and also lot of uncertainties in the export market, he further said.ā
Linkhttp://www.moneycontrol.com/news/business/bajajautofebsalesfall3fy14targetshazysaysco_833424.html
1). Feb 2013 is 28 days compared to 29 days of 2012
2). I donāt expect a small player like Atul to buck the larger industry and economy trend, so lower growth in future is surely expected.
3). However the 2nd point has to be seen in the context of Atulās expansion plans into other states in India, in which they donāt have a presence currently. This, if successfully done can give them a better than average industry growth rate.
Disc: I continue to hold and might add more around 150-160.
Sorry, for a delayed reply.
1). From what i found, Bajaj usesKubota (Japnese) engines for itās auto. Whereas Piaggio, Mahindra and Atul, all use greaves engines.
2). Wasnāt able to get much reliable data on this, as Atul showroom is hardly 5-6 monthās old.
1).
Hi,
Yes, agree with Hitesh bhai that the Feb nos are slow and things may remain slow for coming months too.
If one looks at the industry data (4 wheelers and 2 wheelers too), almost every one has faced negative growth. So its good that atleast Atul has been able to maintain its nos.
I think there is a very major slowdown across the sectors and one after other all the cos are facing demand issues and inflation pressures. Earlier I used to feel that only the biggies are affected but now the pain is showing up in almost every other co. I donāt think such kind of situation can reverse quickly and hence we should be cautious on stocks and be patientā¦do more homework. I think some very good opportunities will come up over next 6 months - 1 year. Liquidity is important in such times.
Ayush
Atul Auto Ltd has informed BSE that the Company has scheduled launch of its new three wheeler product under the brand āGEMINI-Dzā. This product is a three wheeler passenger rickshaw. The product will be available in the market from the current month, i.e. March 2013.
Echo your observations Ayush.
Recently I met a senior investor in Bangalore - he had met some 20 companies across sectors in the last 1 month. He said everywhere he saw pain, he could not cite one instance where promoters were sanguine/bullish about near-term prospects.
Everyone is advised to curb undue enthusiasm, and exercise abundant caution; maintain liquidity; continue to do homework on promising companies. Personally I have been increasing Cash since last Dec on a continual basis (booking winners), selectively.
@ Donald Ji & Ayush & Hit Ji & Other Seniors,
So what % of portfolio would you have in cash??
And when will you increase your equity positions? Small cap index is down 15% YTD. How much more fall can be expected?
Regards,
Jatin
liquidity;
jatin
going into cash depends on oneās own investment style.
I have been in cash to the tune of almost 40% of portfolio and gradually have begun to deploy cash beginning today. have started some trading positions which I intend to offload when targets are reached or stop is hit.
I have my eyes on stocks like gruh finance, mayur uni, canfin homes, for gradual accumulation on every fall.
Basically I think we might be on threshold of a short term tradeable bounce. Overall trend remains down with rallies in between.
Hi hitesh,
are you buying these 3 stocks for trading or your long term portfolio?
Completely agree with the stalwarts - Ayush, Donald & Hitesh about the short-med term pain which could last for atleast a couple of qtrs. I have seen the slowdown in the projects since last couple of months and the rate is increasing. The worst-hit segment is the metal traders.Till an effective rate cut doeshappens, this could continue further. I think the next RBI meet may slash the int rate by 25 to 50bps.