Thank You Hitesh,
Yes DVR will be even more cheap. But if cyclicality is the reason isnt M&M also in the same space? It has a P/E of 15, almost 3 times that of TML. Or is JLR prospects due to Europe woes that is dragging it down?.
TML always had lower P/E than Maruti and M&M I guess, but such difference now bafles me.
Sorry for going off-topic
Cheers
Vinod
Hi Guys,
Atul has taken severe beating in past 2-3 weeks. I guess this is due to the allotment of bonus shares. Is this the right time to accumulate more or some downside risk still persists ??
Views appreciatedā¦
forgot to mention about the Q1 resultsā¦ Has anyone able to get hold of it???
allaying fears expressed in the earlier posts atul auto has come out with good results for q1 fy 13. (comparision needs to be done for june qtrs of fy 12 and fy 13 and not with march qtr as there is a definite seasonality to the business.
Atul Auto net profit rose 17.63% to Rs 3.87 crore in the quarter ended June 2012 as against Rs 3.29 crore during the previous quarter ended June 2011. Sales rose 26.11% to Rs 76.79 crore in the quarter ended June 2012 as against Rs 60.89 crore during the previous quarter ended June 2011.
| Particulars | Quarter Ended | ||
| Jun. 2012 | Jun. 2011 | % Var. | |
| Sales | 76.79 | 60.89 | 26 |
| OPM % | 8.78 | 9.97 | -12 |
| PBDT | 6.83 | 5.87 | 16 |
| PBT | 5.76 | 4.76 | 21 |
| NP | 3.87 | 3.29 | 18 |
biggest culprit in margins seems to be employee expenses which have increased from 3.6 cr to 4.9 cr and change in inventory which has increased from minus 1 crore to plus 4 crores.
do agree that results are not that bad but they donāt seem too exciting. the sales momentum is there but the pressure is now being seen on the bottomline. would like to see more clarity onwhere would the margins stabilise in the medium term.are there any updates on the 100% capacity expansion they had lined up?
disc : i am bullish and adding more.
Does anyone have the details of number of units sold quarterly for the last three years. Tried to search on the net but could get only annual numbers.
Hi,
This seems to be a very good story. I had in my professional work got a chance to interact with Mr. Ramnik kotecha who is one of the directors of the company. He seemed to be a very straightforward and risk averse person, and that maybe can be extended to the company also.
In a growth story i think it is important to see why the idea can fail. Kiran in a previous post has mostly covered this but was trying to give my 2 cents
1). Growth doesnot happen-There is always a possibility that company may not besuccessfulin other states. In such a scenario if they have to roll back from a state what is the amount they tend to lose. Marketing expenses+ inventory should be the losses- can some one shed light on how much do they want to spend in new states?
2). Growth happens, but at low margins- This could be due to lower pricing, dealer discounts, highermaintenance period, or some other customer schemes etc. Again in kerala can anyone tell are they offering any dealer discounts or any other incentives?
3). Super normal increase in RM costs- Does the company have ability to pass on these to customers? If LCV/MHCV segments are to go by then whenever there is an RM increase most companies increase prices of their vehicles in similar ratio. So this leads to overall slowdown in sales, but companies which are able to bundle some service contract/discounts etc do better. Will this happen here also?
Views invited.
Regards,
saurabh
Hi Hemant,
I think the growth is pretty good and we need to see it in ref to the current economic situation. If one looks at the 3 wheeler industry then all the other cos are posting negative growth since last 6 months while Atul Auto is still doing 20-25% growth. So its a good thingā¦ofcourse given the weak rural demand, weak monsoon, the demand may slow down further and as longer term investors we should be okay with it.
The co is still able to grow as they are entering new territories and trying to gain small market shares.
I agree with Hitesh, I think Atul should be able to do 18-20 EPS for FY 13 and at CMP of 100, it does offer value, IMHO.
Ayush
I agree ayush. cmp of around 100 odd levels offers excellent entry points for long term investors. In fact I expect dividend of around Rs 5 on post bonus equity for fy 13 as well looking at the numbers and management intent.
the company is being punished for the fears regarding the sector. By itself it has posted good results.
This one could easily offer 50% returns within 8-12 months once the sentiments revive. Till date the management doesnt seem to have put a foot wrong.
this is from the annual report-we depreciated the value of our investments in khushbu auto by 107 lacs,our investments in associated companies include 230 lacs in khushbo auto,related party transactions are quite a bit,sales of approx 42 cr. and recievables of 6 cr.What prevents them from making investments like this in the future?like somebody has written before it is coomon in family held businesses,may be it is done to favor family members etc.In my feeling it hampers efficiency,efficint price discovery and there are chances of siphoning of funds.integrity,honesty of mgmt is important insuch cases and maybe somebody can comment on it.
Hi Biju,
From the face of things, Khushbo Finance seems to be a venture of the group in the 3 wheeler financing space and I donāt see anything particularly wrong in it. Yes, the venture hasnāt been great but then they donāt seem to have lost any major money. Most of the loans and advances to Khushbo Finance has been repaid back.
Had the sales being made to a individual or associate co without any purpose then it should be questionable.
If one looks into the history of the co, they seem to be fair and investor friendly
Ayush
Dear All,
Atul auto has fallen over 27% post the bonus issueā¦Is the damage done or still more downside in the offering??? As the forum conceives (and to which even I agree) that this is a growth storyā¦but there seems to be more to this downside than just the bonus sharesā¦
views invited (as I seriously hope I am wrong)ā¦
I think the fall is more due to the perception of sectoral tailwinds affecting the sector.
Atul 3-wheeler Malayalam ad film ,bit lengthy but looks neat
thanks hardtoget.
first time i saw an ad of atul auto.
but i definitely see a lot of vehicles made by the company these days.
or maybe since i am interested in the company i tend to observe their vehicles more closely now.
Same with me when I purchased TCI shares I started seeing more TCI containers on Highway
with each passing day, this is becoming a classic case of either massive undervaluation and hence a very good accumulation oppurtunity or some developments which are not in public domain right now which have made the stock crash more than 35%. any thoughts?
Thanks for sharing the advertisementā¦looks nice
The stock is back to the levels from where it took off, i think this are should be a good support technically.
One observation from my side - the delivery volumes are very less over last few days. Only today decent delivery has taken place.
Ayush
Have started looking at three wheelers after getting interested in this stock,just my observations after looking at the three wheelers in south gujarat/rural and urban,do some travelling thru the rural belt also.
1.The load carrying(cargo) ones are predominantly ATUL.
2.The passenger ones in the cities are predominantly bajaj(CNG driven).
3.Rural areas where there is lack of public transport-saw PIAGGIO plenty of them carrying 10-12 passengers,saw a few atul,but there were more piaggios,both of them look more or less similar .
Gujarat is a big state ,it may be otherwise in saurashtra their home turf/northern gujarat.
Mr, Ayush, Is it right level to buy this stock for LT or some more down side is still possible?
reg
paturi
