Automotive industries are primarily engaged in the manufacturing of motor vehicles, components, engines, and bodies. The automobile industry segments include light vehicles, trucks, electric cars, plug-in-hybrids and autonomous vehicles.
According to SkyQuest Technology, the Indian automotive market was valued at $100 billion in 2021. It is projected to grow from $116.86 billion in 2023 to $201.57 billion by 2028, reflecting a compound annual growth rate (CAGR) of 8.1 percent.
With a market capitalization of Rs 8,639.51 crore, the stock price of Force Motors Ltd., which started its trading session at a higher note of Rs 6,494 per share, rose by 3.4 percent from its previous close of Rs 6,421.6 per share to a 52-week high of Rs 6,640 per share.
Here are the reasons why Force Motors Ltd. has delivered a 50 percent return on a year-to-date basis.
In January 2024, Force Motors Ltd. released details of its production, sales, and exports. The report shows that in the segment of small commercial vehicles and light commercial vehicles, a total of 2,158 units were sold, and in the segment of utility vehicles, sports utility vehicles, and tractors, 454 units were sold both domestically and internationally.
Subsequently, in February, sales increased by 4 percent with 2,249 units of small commercial vehicles and light commercial vehicles, as well as in the segments of utility vehicles, sports utility vehicles, and tractors, which increased by 37 percent to 621 units.
Furthermore, the company also announced its plans to invest Rs 2,000 crore for sustainability and electric vehicle development in the upcoming three to four years. With this investment, the company aims to bring electric versions of its van and also plans to install the second-largest paint shop and increase the usage of green energy.
The company has delivered multibagger returns of 432 percent over one year. Therefore, an investment of Rs 1 lakh a year ago would now be worth Rs 5.32 lakh.
On a yearly basis, revenue from operations increased by 30 percent, from Rs 1,304 crore in Q3 FY23 to Rs 1,692 crore in Q3 FY24. During the same period, the company’s net profits substantially increased by 631 percent, shifting from a net loss of Rs 16 crore to a net profit of Rs 85 crore.
Sequentially, on a quarterly basis, the revenue from operations decreased by 6 percent, from Rs 1,802 crore in Q2 FY24 to Rs 1,692 crore in Q3 FY24. Similarly, the net profits also decreased by 10 percent from Rs 94 crore to Rs 85 crore during the same period.
Now looking at the key financial parameters, the return on equity of the company stands at 1.76, and the return on capital employed stands at 4.73 percent in the trailing twelve months (TTM).
Written By Praveen R
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