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CD Equisearch
Atul Auto (Buy)
CMP: ₹457.20
Target: ₹586
Atul Auto Ltd (AAL) is one of the youngest players in the three-wheelers business with humble beginning in 1992 that started with manufacturing of Chhakaras (Rural Transportation Vehicle — RTV). Company produces auto rickshaw under Atul Shakti, Atul Smart, Atul Gem and Atul Gemini-DZ. AAL reported revenue and PAT of ₹122.48 crore and ₹8.63 crore respectively, in Q4FY15 compared with the revenue and PAT of ₹112.58 crore and ₹8.43 crore respectively, in Q4FY14 registering a revenue growth of 9 per cent and PAT growth of less than 2.5 per cent because of higher tax outgo. AAL has emerged as one of the fastest growing three-wheelers company in India, capturing both market share and investors imagination alike. Its growth trajectory has been impressive with volumes growing at a CAGR of 34 per cent over FY09-15 even as the domestic 3-wheelers segment has grown at a meagre r 7 per cent over the same period. AAL’s performance has been quite encouraging and consistent with strong top line and bottom line growth. We believe the worst is over for automobile industry and the sector is poised to grow well on the back of improving economy with strong government at the centre and improving consumer sentiments.
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