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Autoline Industries Ltd - Multibagger (PYT)
Monday, May 21, 2007
Meherboon Irani, Darashaw and Co
The prospects of Autoline look good based on the aggressive expansion plans and acquisition of Stokota. A price of Rs 450 looks attainable over a 12-mth period.
Autoline Industries Ltd is a design engineering and manufacturing solutions provider focused on sheet metal assemblies and formed tubular products, with integrated engineering, tool design and manufacturing facilities, in Pune, India. Tata Motors, which buys components for passenger cars and commercial vehicles, is Autoline's largest customer accounting for about 85% of revenues in FY 2006.Apart from Tata Motors, the customers include M&M, Bajaj Auto, Kinetic Engineering, Fiat , Stokota, among others. Though Autoline commenced activities by contract manufacturing of sheet metal components,the range of products presently cover sub-assemblies, formed tubular products like silencers, exhaust systems, brake shoes, load bodies for light and heavy commercial vehicles, etc.
The company has embarked upon an aggressive expansion plan. The company has doubled up its capacity to 450 load bodies per day, to meet the requirements of 400 load bodies per day as indicated by Tata Motors. The company was earlier supplying 250 load bodies a day. The company is setting up a new facility for the manufacturing of all kinds of load bodies for heavy vehicles at Chakan in the premises of Unit-II. Production in this capacity will begin from June 2007.
The company in February 2007 has acquired 51% in Stokota's global operations for Rs 66.8 crore in cash and equity. Stokota is Europe's leading maker of custom-made vehicle bodies like tippers, trailers, cement bulkers, oil & gas fuel tankers. The acquisition of Stokota has opened up new markets in Europe, South-East Asia, Australia and the US for Autoline Industries.
Autoline raised Rs 75 crore through an IPO in January 2007 to upgrade and expand Autoline's Chakan facility in Pune; set up another manufacturing facility at the same location; relocate and consolidate a couple of smaller units; establish a corporate office; fund acquisitions, and provide long-term working-capital resources.
In August 2006, the company entered into aMoU WITH Detroit Engineered Products Inc., a company based in Detroit, USA, and engaged in high-end design engineering services and providing services to almost all leading automobile companies in the world such as General Motors, Ford Motors, Toyota, Honda, Hyundai, etc. Earlier this month, the company acquired a 51% stake in Detroit as a strategic investor.
Also, exciting times lie ahead for the Indian automotive component industry taking into account the increasing demand from global auto majors and also the domestic car industry, which is growing at a impressive rate of over 16 per cent, driven by a rising consumer base.
The sales of the company increased 65% in FY07 to Rs 183 crore as compared to Rs 111 crore in FY06. The net profit of the company increased 114% to Rs 15 crore in FY07 against Rs 7 crore the previous year.
The turnover in FY08 is expected to increase to Rs 550 crore due to doubling-up of capacity, wherein production has already begun. Also post acquisition of Stokota, we expect the orders to increase. The net profit in FY08 is expected to increase to Rs 46 crore, the EPS on equity of Rs 10.2 crore works out to be Rs 45.
At Friday's closing price, the stock is trading at 4.95x its FY08 earnings. The prospects of the company look good based on the aggressive expansion plans and acquisition of Stokota, a price of Rs 450 looks attainable over a 12-months period.
The prospects of Autoline look good based on the aggressive expansion plans and acquisition of Stokota. A price of Rs 450 looks attainable over a 12-mth period.
Autoline Industries Ltd is a design engineering and manufacturing solutions provider focused on sheet metal assemblies and formed tubular products, with integrated engineering, tool design and manufacturing facilities, in Pune, India. Tata Motors, which buys components for passenger cars and commercial vehicles, is Autoline's largest customer accounting for about 85% of revenues in FY 2006.Apart from Tata Motors, the customers include M&M, Bajaj Auto, Kinetic Engineering, Fiat , Stokota, among others. Though Autoline commenced activities by contract manufacturing of sheet metal components,the range of products presently cover sub-assemblies, formed tubular products like silencers, exhaust systems, brake shoes, load bodies for light and heavy commercial vehicles, etc.
The company has embarked upon an aggressive expansion plan. The company has doubled up its capacity to 450 load bodies per day, to meet the requirements of 400 load bodies per day as indicated by Tata Motors. The company was earlier supplying 250 load bodies a day. The company is setting up a new facility for the manufacturing of all kinds of load bodies for heavy vehicles at Chakan in the premises of Unit-II. Production in this capacity will begin from June 2007.
The company in February 2007 has acquired 51% in Stokota's global operations for Rs 66.8 crore in cash and equity. Stokota is Europe's leading maker of custom-made vehicle bodies like tippers, trailers, cement bulkers, oil & gas fuel tankers. The acquisition of Stokota has opened up new markets in Europe, South-East Asia, Australia and the US for Autoline Industries.
Autoline raised Rs 75 crore through an IPO in January 2007 to upgrade and expand Autoline's Chakan facility in Pune; set up another manufacturing facility at the same location; relocate and consolidate a couple of smaller units; establish a corporate office; fund acquisitions, and provide long-term working-capital resources.
In August 2006, the company entered into aMoU WITH Detroit Engineered Products Inc., a company based in Detroit, USA, and engaged in high-end design engineering services and providing services to almost all leading automobile companies in the world such as General Motors, Ford Motors, Toyota, Honda, Hyundai, etc. Earlier this month, the company acquired a 51% stake in Detroit as a strategic investor.
Also, exciting times lie ahead for the Indian automotive component industry taking into account the increasing demand from global auto majors and also the domestic car industry, which is growing at a impressive rate of over 16 per cent, driven by a rising consumer base.
The sales of the company increased 65% in FY07 to Rs 183 crore as compared to Rs 111 crore in FY06. The net profit of the company increased 114% to Rs 15 crore in FY07 against Rs 7 crore the previous year.
The turnover in FY08 is expected to increase to Rs 550 crore due to doubling-up of capacity, wherein production has already begun. Also post acquisition of Stokota, we expect the orders to increase. The net profit in FY08 is expected to increase to Rs 46 crore, the EPS on equity of Rs 10.2 crore works out to be Rs 45.
At Friday's closing price, the stock is trading at 4.95x its FY08 earnings. The prospects of the company look good based on the aggressive expansion plans and acquisition of Stokota, a price of Rs 450 looks attainable over a 12-months period.
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Investment in equity shares has its own risks. Sincere efforts have been made to present the right investment perspective.The information contained herein is based on analysis and up on sources that we consider reliable. I, however, do not vouch for the accuracy or the completeness thereof. This material is for personal information and I am not responsible for any loss incurred based upon it.& take no responsibility whatsoever for any financial profits or loss which may arise from the recommendations given in this blog.
