The automotive industry in India is the largest, accounting for around 2.3% of the Indian GDP. India being the third largest steel producer provides a cost advantage to the auto components manufacturers as steel is a major raw material for them.
According to ACMA, overall automotive industry turnover would rise by 10-15% in FY24. The auto components sector expanded by 23% in FY22 and is expected to rise by 15% this fiscal year.
Here are three Fundamentally strong Auto Auxiliary stocks
Shriram Pistons & Rings Ltd
Shriram Pistons & Rings Ltd, India’s largest manufacturer of Pistons, Rings, and Engine Valves, the company caters to automotive parts in domestic and international markets.
Shriram Pistons & Rings Ltd shares were trading at Rs 1,988 per share on June 26, up 4.85 percent. With a market valuation of Rs 4,371 crore, the firm falls into the small-cap category.
Revenue climbed by 26 percent year over year, rising from Rs 2,064 crore in FY 21–22 to Rs 2,609 crore in FY 22–23. Net profit increased by 80 percent, from Rs. 163 crore to Rs. 293 crore.
In recent years, profitability ratios have improved. For FY23, ROE is 19.21 percent, ROCE is 23.21 percent, and the debt-to-equity ratio is 0.2. Similarly, the operating margin is 15.80 percent and the net profit margin is 11.26 percent.
The company’s price-to-earnings ratio is 14.21, which is lower than the industry P/E of 44.48, signifying that the stock is trading at a lower price, and it has an EPS of 133.44.
Sansera Engineering Ltd
Sansera is a renowned brand in the sector of agricultural vehicle spare parts, with a visible and distinctive presence all over the world.
Shares of Sansera Engineering Ltd. were trading at Rs 866.80 apiece, up 0.02 percent on June 26. The company belongs to the small-cap category with a market capitalization of Rs 4,594 crore.
Revenue climbed by 20 percent year on year, rising from Rs 1,745 crore in FY 21-22 to Rs 2,090 crore in FY 22-23. Net profit has increased by 17 percent, from Rs 128 crore to Rs 150 crore.
The profitability ratio has increased over time, for FY23, ROE is 12.70 percent and ROCE is 16.25 percent, with a net profit margin of 7.18 percent and operating margin of 12.13 percent.
The company’s price-to-earnings ratio is 31.86, which is lower than the industry P/E of 44.48, signifying that the stock is trading at a lower price, and it has an EPS of 27.20.
Pricol Ltd.
Pricol is a leading participant in the two-wheeler instrument cluster market, and also sells associated vehicle components to OEMs.
On June 26, Pricol Ltd shares were trading at Rs 233.50 per share, up 0.71 percent. With a market valuation of Rs 2,845 crore, the firm falls into the small-cap category. The company has been in the news lately for its alleged hostile takeover by Minda Corporation.
Revenue climbed by 27 percent year on year, rising from Rs 1,544 crore in FY 21-22 to Rs 1,958 crore in FY 22-23. Net profit has increased by 125 percent, from Rs 55 crore to Rs 124 crore.
The profitability ratio has increased over time, for FY23, ROE is 17.70 percent and ROCE is 19.33 percent, with a net profit margin of 6.36 percent and operating margin of 7.92 percent.
The company’s price-to-earnings ratio is 22.64, which is lower than the industry P/E of 44.48, signifying that the stock is trading at a lower price, and it has an EPS of 10.24.
Written by Omkar C
Disclaimer
The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Dailyraven Technologies or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
