It is remarkable that out of the thousands of stocks, the Motilal Oswal’s 19th Wealth Creation Study has homed in on seven stocks that qualify as potential 100-baggers and that Atul Auto is one of the seven to be conferred the distinction.
Atul Auto fits in nicely with the five salient qualities identified in the Wealth Creation Study:
| (1) Size: The company should be small and relatively unknown; | Atul Auto has a market capitalisation of only Rs. 1400 crore |
| (2) Quality: The company should have a high-quality business run by a high-quality management (i.e. one with integrity, competence and growth mindset); | This is brought out by Vijay Kedia’s assertion a few days ago that the promoters are honest, hardworking and god-fearing. |
| (3) Growth: There should be healthy growth in the company via a combination of sales volume and/or price and/or margins; | This is brought out by the past record which shows a sustained growth of top-line and bottom-line |
| (4) Longevity: The company should be likely to sustain its quality and growth for a long time; | No reason to doubt this given the quality of the products and the competence of the management |
| (5) Price: The stock should be favorably valued. | The stock has run up considerably in a short time (622% in 2 years and 332% in one year). It is quoting at a P/E of 36 which is not cheap. However, if the growth trajectory continues, the present P/E will look cheap in future |
In my last piece, I have explained how Vijay Kedia, Atul Auto’s largest shareholder, has made a phenomenal 5700% gain in the past nine years. There is no reason why this spectacular performance cannot be replicated in the next several years to come.
In fact, a number of super-savvy investors like Raamdeo Agrawal and Prashant Jain are confident that Atul Auto will attain the exalted status of a 100-Bagger if you go by their massive holdings of the stock.
So, if you don’t have Atul Auto in your portfolio, you need to quickly research it and consider whether a SIP is the appropriate manner to tuck into it.
Current market cap of Atul Auto is about 1500 crores. At 100 times this value, its Mcap will approach that of Tata Motors! Perhaps it may still happen, but certainly boggles the mind today ! And assuming even a 50 times growth in number of autos sold, that would mean 50X50K = 2.5million autos per year…and adding to this number the autos made by TVS and Bajaj…we may have Indian roads over-run with autos in the next decade 😀
Something does not add up here. Atul auto certainly has growth ahead, but 100 bagger….I find it hard to imagine that happening.
Agree, if atul were making a new technology product, it might have stupendous growth, but a product that is almost obsolete cannot give much growth, and the marketing of atul is abysmal, to say the least.
Hi,
This feels interesting, no one can give a 100% guarantee that Atul will be a 100 bagger, but it is almost sure that this is a growth story. But the stock now seems expensive, but i think good businesses are always sold at a premium.
The company has huge upside,considering the export growth it can cater to on the neighbouring countries…
wait n watch till then…
Discl : hold it
people buy the stock and same stock comes out in different avatar as great buy after one year too!! foot note of the holding missing in the reports !!??
who told Atul Auto is undiscoverd stock ?
Autos are being slowly replaced by Taxis. You could see that in metros like Bangalore. Taxis available at the same price (or even cheaper) and safer than autos. This trend will slowly move to Tier 1 and 2 cities also. While Atul Auto offers good opportunity it can’t be 100 bagger as the scale of that sector is not that huge. The Pharma companies in MOSL’s 100 bagger list are good candidate as like IT the whole world is customers for them.