The auto ancillary sector in India plays a crucial role in supporting the rapidly growing automotive industry, contributing significantly to the country’s GDP and employment.
The sector comprises numerous companies that supply essential components and parts to original equipment manufacturers (OEMs), this sector is characterized by its diverse offerings, including engines, gearboxes, and electrical systems.
The sector has attracted considerable investor interest, with companies leveraging advancements in technology and strategic partnerships to enhance their market position and profitability.
Listed below are such auto-ancillary stocks whose PE is less than the Industry:
Lumax Auto Technologies Ltd
With a market capitalization of Rs. 3,816 crores, the shares of Lumax Auto Technologies started Friday’s trading session on a lower note at Rs. 545 compared to its previous close of Rs. 549. During the trading session, the shares hit a high of Rs. 562, gaining around 2 percent and closed the day at Rs. 554 apiece.
Looking at the company’s financial performance, the revenue increased by around 3 percent from Rs. 732 crores during the December quarter to Rs. 757 crores in the March quarter. In addition, the net profits jumped by 6 percent from Rs. 48 crores to Rs. 51 crores during the same period.
In terms of key financial metrics, the company reported a Return on Equity (RoE) of 16.48 percent and a return on capital employed (RoCE) of 19.82 percent for the period spanning FY23-24. Additionally, during the same period, the net profit margin stood at 5.91 percent.
Furthermore, the stock might be deemed undervalued, given its PE ratio of 29.7 times, in contrast to the industry average of 35.4 times.
Shriram Pistons & Rings Ltd
With a market capitalization of Rs. 8,577 crores, the shares of Shriram Pistons & Rings started Friday’s trading session on a lower note at Rs. 1,990 compared to its previous close of Rs. 1,994.60. During the trading session, the shares hit a low of Rs. 1,935, losing around 3 percent and closed the day at Rs. 1,947 apiece.
Coming onto the company’s financial statements, the revenue decreased by around 2 percent from Rs. 856 crores during the March quarter to Rs. 837 crores in the June quarter. Contrastingly, the net profits increased marginally by around 1 percent from Rs. 116 crores to Rs. 117 crores during the same timeframe.
In terms of key financial metrics, the company reported a Return on Equity (RoE) of 23.13 percent and a return on capital employed (RoCE) of 26.55 percent for the period spanning FY23-24. Additionally, during the same period, the net profit margin stood at 14.19 percent.
Moreover, the share can be considered to be undervalued as the PE ratio stands at 19.8 times compared to the industry average of 35.4 times.
Munjal Auto Industries Ltd
With a market capitalization of Rs. 1,089 crores, the shares of Munjal Auto Industries started Friday’s trading session on a lower note at Rs. 104 compared to its previous close of Rs. 106.89. During the trading session, the shares hit a high of Rs. 111.30, gaining around 2 percent and closed the day at Rs. 108 apiece.
Looking at the company’s financial statements, the revenue decreased by around 4 percent from Rs. 422 crores during Q3FY24 to Rs. 406 crores in Q4FY24. On the other hand, the net profits showcased a transition from a net loss of Rs. 23 crores to a net profit of Rs. 36 crores during the same period.
In terms of key financial metrics, the company reported a Return on Equity (RoE) of 9.59 percent and a return on capital employed (RoCE) of 15.74 percent for the period spanning FY23-24. Additionally, during the same period, the net profit margin stood at 2.02 percent.
Additionally, the stock might be deemed undervalued, given its PE ratio of 24.8 times, in contrast to the industry average of 35.4 times.
Jamna Auto Industries Ltd
With a market capitalization of Rs. 5,575 crores, the shares of Jamna Auto Industries started Friday’s trading session on a lower note at Rs. 139.90 compared to its previous close of Rs. 142.07. During the trading session, the shares hit a low of Rs. 138.40, losing around 2 percent and closed the day at Rs. 139 apiece.
Coming onto the company’s financial performance, the revenue increased by around 6 percent from Rs. 604.01 crores during the December quarter to Rs. 640.15 crores in the March quarter. In addition, the net profits increased marginally by 0.3 percent from Rs. 54.94 crores to Rs. 54.77 crores during the same timeframe.
In terms of key financial metrics, the company reported a Return on Equity (RoE) of 22.74 percent and a return on capital employed (RoCE) of 30.58 percent for the period spanning FY23-24. Additionally, during the same period, the net profit margin stood at 8.46 percent.
Furthermore, the share can be considered to be undervalued as the PE ratio stands at 28.4 times compared to the industry average of 35.4 times.
Written By Vaibhav Patil
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.
