Vijay Kedia owned Automobile stock engaged in manufacturing and selling auto-rickshaws declined nearly 5 percent to Rs.655.1 per share following decrease in net profits of 85 percent quarter-on-quarter.
Price Movement
The share price of Atul Auto Ltd. dropped nearly 5 percent, falling from its previous close of Rs.686.95 to an intraday low of Rs.655.10 on Monday’s trading session.
Financial Performance
The decline in the stock price was attributed to weakening financials, including a drop in net profits and revenue from operations.
With a market capitalization of Rs.1,868 crores, Atul Auto Ltd. reported consolidated revenue of Rs.123.65 crores for the quarter ending June 2024. This represents a 17 percent decline from Rs.149.06 crores in the previous quarter, though it is a notable 154.7 percent increase compared to Rs.48.53 crores in Q1 FY24.
The company experienced an 84.42 percent quarter-on-quarter decrease in Profit After Tax (PAT), falling to Rs.76 crores in Q1 FY25 from Rs.488 crores in the March 2024 quarter. However, PAT improved from a net loss of Rs.941 crores in Q1 FY24.
Atul Auto’s financial performance has been underwhelming, reflected in its price-to-earnings ratio of 141.64, which is substantially higher than the industry average of 80.13.
The company’s return ratios are also low, with a Return on Capital Employed (ROCE) of 4.77 percent and a Return on Equity (ROE) of 3.36 percent.
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Segment Revenue Mix
Atul Auto Ltd. primarily operates in the Automobile segment, which contributed 91.5 percent of its revenue for the quarter ended June 2024. The company also operates in Non-Banking Financial services which contributed the remaining 8.5 percent of the revenue.
Geographical Presence
The company has a strong domestic presence, with operations in 21 states and over 600 touchpoints, including 200 primary and 130 secondary networks. This extensive distribution and service network allows Atul Auto to cater effectively to a diverse customer base across India.
Atul Auto has also made strides in international markets, exporting its vehicles to several countries.
Shareholding Composition
According to the June 2024 shareholding pattern, the promoters of Atul Auto Ltd. hold a 42.74 percent stake. Foreign Institutional Investors have a 0.59 percent stake, Domestic Institutional Investors hold 0.41 percent, and Retail investors own 56.28 percent of the company. Vijay Kedia personally holds an 18.2 percent stake, while his brokerage firm, Kedia Securities Private, owns 2.71 percent of the company’s shares.
About the company
Atul Auto Ltd. is a prominent player in the three-wheeler manufacturing sector in India, primarily focusing on auto rickshaws, tuk-tuks, and e-rickshaws. The company also provides Non-Banking Financial Services. It provides after-sales support to the customers through the dealership network.
Written by – Siddesh S Raskar
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