No, they were not sure as to when they will get back to pre-covid volumes. Please note that pre-covid they did maximum volumes of 4000-4500/month which only translates to around 50’000 vehicles a year. So reaching 120’000 a year looks like a tall ask.
Disclosure: same as before
Yes, getting to 100,000 unit sales will take some time but just wanted to understand if their capex is already done or if it will be completed in current fiscal. I was hoping them to clock 60-70k sales in next fiscal.
As similar to PV, have the prices of 3W autos also have increased? I am sure EV autos will be sold at higher prices but even other models?
FADA numbers for Sep month. Some mismatch in Atul Auto’s numbers due to non availability of data from few states (as the disclaimer says). Company reported Sep sales of 2250 vehicles as per exchange disclosure
Marketshare of leaders is declining and Others is increasing, indicating more fragmentation of the marketplace. Not a good thing from investor point of view.
Did the company management indicate the need for fund raise?
Also, with this allotment, Vijay Kedia will hold close to 20% in Atul Auto and he is also been allotted a significant minority holding in the subsidiary Atul Greentech. Would like to understand the interest Mr. Kedia has in Atul Auto business
Just thinking aloud:
1. Maybe Atul Auto is planning to bring in a strategic partner soon, where Mr. Kedia sells out to the strategic partner? This way, the promoters will continue to have the controlling stake and Mr. Kedia gets a great exit?
2. Considering the alternate scenario of Mr. Kedia buying for the long-term - Can a small player like Atul Auto match the big players in terms of technology, investments and market reach? If he thinks they can’t, Mr. Kedia will not want to buy a stake for the long-term?
3. Apart from the conventional players like Bajaj Auto, Piaggio, TVS and M&M (market leader in EV 3-wheelers), Murugappa group’s TI cycles has recently entered EV 3-wheelers and there are also startups like Euler. Could these players be interested in Atul Auto’s strong brand and presence in Gujarat/Rajasthan, the distribution network and manufacturing base? Also, possibly a foreign player sees a big opportunity in the EV 3-wheeler space in India and wants to enter through a strategic partnership with Atul Auto?
Thoughts please?
Disclosure: Invested.
It’s surely a big development as the company has been struggling and seems to have lost market. Perhaps the biggest driver would be if they can do something good on the EV front (we should focus on this and keep a tab)
Thanks for sharing it. It is very informative. Could you please let me know where I can download it for the previous months?
Please check the below given link for the monthly sales data
I think the money raised my Vijay kedia and promoters will be used to pay of part of standalone debt and for further working capital needs.
Fund raise is primarily to repay debt and little bit towards working capital & general corporate purposes
The Atul Auto CFO says the Rs. 115 cr will be used for repaying debt, working capital requirements and general corporate purposes. There’s something more to this?
I went back to the last upcycle from 2012-2015. A few observations:
1. The stock was rising exponentially during this period.
2. Mr. Vijay Kedia’s stake in FY 13, FY 14 and FY 15 was 18.86%,16.3%, 1.16% respectively.
3. Multiple bulk deals in 2013 and 2014 - Mr. Kedia sold shares worth around Rs. 18.5 crores to HDFC MF at Rs. 615 and a lot more shares in the Rs. 360-Rs. 430 range to institutional players like Birla MF, Birla Sun Life MF, Goldman Sachs India Fund. He also sold 1.75 lakh shares at Rs. 260 to Mr. Ramdeo Agrawal and Osag Enterprises (owned by Mr. Ramdeo Agrawal and Mr. Motilal Oswal).
4. In FY 12, promoter holding increased by 1.5% (there was a rights issue at Rs. 30). In FY 13, FY 14 and FY 15, promoter holding reduced by 4.2%, 1.55% and 2.39%. Promoters sold shares worth around Rs. 21.7 crores through bulk deal, most of which at Rs. 610 to institutional players - Goldman Sachs India, Goldman Sachs Asset Mgmt. and India Investment Partners.
5. Noticeable change in annual report from FY 10 to FY 13: More attractive to look at - colourful, better design and font, more pictures, more details about the company and bullish commentary by management.
6. Many interviews by Mr. Kedia (in the capacity of Director of Atul Auto) on the company and bullish outlook.
7. Gave this interview in the capacity of an investor during the time he was selling Atul Auto shares: Management of a company my first priority before making investment: Vijay Kedia, Kedia Securities - The Economic Times
I found this old comment by @ashwinidamani in this VP thread instructive:
"A. How many people know Ramdeo Agarwal vs. Vijay Kedia (purely meaning who commands more glamour following and publicity)
B. By transferring 5% of his shares he has suddenly attracted more visibility/publicity for the stock
C. By transferring 5% of his shares he has attracted more value for every balance share which he holds.
Net Net he has created more value by transferring merely 5% of his holding. Isn’t it a win-win deal for him.
You need to unlock value someway–he is doing it the smart way."
Based on the above, could these be some possibilities behind Mr. Kedia looking to increase his stake to almost 20%?
1. Something similar to the 2012-2015 cycle repeats as he converts warrants in the coming months? This article from Business Standard mentions: “One possibility could be contract manufacturing for an upcoming electric 3-W player domestically.” Is he timing it right to ride the coming tailwinds for Atul Auto?
2. Sell out to a strategic investor and get a great exit or something along these lines?
Competition among 3-wheeler brand and ranking for September-2022 . . .
Atul Auto’s last Six month’s sales growth is good enough reason for stock price to recover from May-June-July accumulation / compression
September 20% YoY
August 38% YoY
July 46% YoY
June 151% YoY
May 1694% YoY
April 74% YoY
The table shows 13.78% yoy which is the least among all the companies in the table.
Atul’s monthly growth % is lowest compared to other companies for Sept-2022
But when compared this number with Atul’s own number for previous 6 month, it gives another perspective
Similar for other companies, are other companies’ Sales growth % consistently rising for last 6 months or just for September?
FADA table published it as 13.78%, but company filing is for 20%
Company filing also shows H1 sales growth 78%
There are much better companies like https://www.saeraauto.com in unlisted category.
Icici sec has no such report as mentioned in the Business Standard article.
Sharing some key data points gathered from AR 2018 -2022
Average Sales Realization – 158789 – 2022
Average Sales Realization – 163506 - 2021
Average Sales Realization – 135436 – 2020
Average Sales Realization – 135436 – 2019
Need to figure out why the prices have gone down in 2022, considering the commodity inflation, realizations should be higher
Cargo , Passanger & E-Richshaw split
2022
Cargo – 41%
Passenger – 48%
E-Rickshaw – 11%
2021
Cargo – 50 %
Passenger – 45%
E-Rickshaw – 5%
2020
Cargo – 39.51 %
Passenger – 58.86%
E-Rickshaw – 1.63%
E-Rickshaw has grown substantially from 1.63% to 11%
Point to Note, Passenger constitutes a larger share of the sales, passenger sales come from Individuals and this can be subdued because there was a significant treasury loss to Individuals during Covid Period, this may take time to bounce back.
Volumes
2022 – 16061
2021 – 16295
2020 – 44082
2019 – 50049
2019 – 42744
2018 – 38795
2017- 43893
2016 - 41598
Exports - Atul
2017 – 2288
2018 – 3411
2019 - 5536
2020 - 3077
2021 - 946
2022 - 1605
Exports Industry
2017 – 271894
2018 – 381002
2019 – 567683
2020 – 501651
2021 – 392941
2022 – 530470 (approx., as per atul auto AR 2022)
EBITDA Margins (%)
11.85% - 2010
9.95% - 2011
9.42% - 2012
11.56% - 2013
11.23% - 2014
12.94% - 2015
14.61% - 2016
13.04% - 2017
13.51%- 2018
The starting prices are as follows :
1) Atul Elite (E-Rickshaw) : Around 1.15 lakhs
2) Atul Gem (Cargo) : Around 2.7 lakhs
3) Atul Gem Paxx : Again Around 2.7 lakhs
So in my Sense, what’s happening is a cocktail of two things -
a) E-Rickshaw sale has increased which has lower sales price.
b) Total No of units sold is falling.
Due to this, the avg realisation is a taking a hit.
Disc : Invested in my Core Portfolio.
Atul Auto Ltd. | CMP Rs. 262 | M Cap Rs. 575 Cr | 52 W H/L 298/145
(Nirmal Bang Retail Research)
No. of Vehicles Sold 6104 vs QoQ 5205,YoY 4592
Result improved
Revenue from Operations came at Rs. 113.6 Cr (17.4% QoQ, 38.5% YoY) vs QoQ Rs. 96.8 Cr, YoY Rs. 82 Cr
EBIDTA came at Rs. 4.3 Cr (-457.9% QoQ, -193.5% YoY) vs QoQ Rs. -1.2 Cr, YoY Rs. -4.6 Cr
EBITDA Margin came at 3.8% vs QoQ -1.3%, YoY -5.6%
Adj. PAT came at Rs. 0.4 Cr vs QoQ Rs. -4.2 Cr, YoY Rs. -4.5 Cr
Quarter EPS is Rs. 0.2
Stock is trading at P/E of 14.5x FY24E EPS
