In November 2013, when Raamdeo Agrawal announced that he had bought 100,000 shares of Atul Auto at Rs. 260 each, a lot of people were surprised. Atul Auto had been on the boil for quite some time and its stock price was considered quite high. Also, the auto sector was undergoing a slow down. “Is there any more juice left in the stock” investors wondered.
Raamdeo Agrawal did not say anything though his firm Motilal Oswal issued a research report explaining that Atul Auto was a great buy owing to its’ high revenue and volume CAGR of 20%, high margins, negative working capital and high dividend payout. It exhorted investors to tuck into the stock.
The analysis was spot on because at today’s CMP of Rs. 500, Raamdeo Agrawal is looking at a fabulous gain of 92% over his investment of just about 6 months.
Now, the important point is that if you don’t have a chunk of Atul Auto in your portfolio, you need to urgently ponder over it. Atul Auto is still a micro-cap with a market capitalisation of only Rs. 566 crore. It is, as Motilal Oswal’s research report calls it, “India’s fastest growing three-wheeler company” and the drivers for its future growth are “Geographical expansion, widening product portfolio and exports”.
The other point that you should bear in mind is that Vijay Kedia, the savvy investor, is the single largest shareholder of Atul Auto with 18L shares worth about Rs. 90 crore. Vijay Kedia is also the largest individual shareholder of Cera Sanitaryware, another top-favourite multi-bagger stock.
If you want more data on Atul Auto, you can read the research reports by ICICIDirect (pdf) and FirstCall Research (pdf).
Speaking for myself, I followed Raamdeo Agrawal’s footsteps and bought a chunk of Atul Auto. I intend to keep nibbling on the stock at every opportunity.
Not to take away anything from Auto Auto, or Mr. Agarwal, here’s some interesting comparison data.
From Atul Auto’s website:
The Company has sold 2,808 vehicles in the month of May 2014 as compared to 2,516 vehicles in the month of May 2013 showing growth of 11.61%.
Further, the total sales from April 2014 to May 2014 was 5,211 vehicles as compared to 4,766 vehicles from April 2013 to May 2013, showing growth of
showing growth of 09.34%.
Now compare with Competition, TVS Motors.
Three-wheeler sales of the company grew from 5,805 units in May 2013 to 9,059 units in May 2014, an increase of 56%.
Sales of three-wheelers grew by 20 per cent in May as compared to 7,504 units in April 2014.
Sales growth is much higher in TVS motors, although margins are thinner, but there are other reasons for that.
Disc: I am invested in TVS.
Thanks,
Arun
@arun
gud statistics
Hi Arjun,
Request you to share your own portfolio along with prices at which you bought.
Vijay kedia is a heavy seller if you can note bulk posting for months
must have felt sorry, he sold i think 2-3% of his stake in Atul Auto, after which the stock has gained nearly 10%.
arun,
would be great if you could share your own portfolio with us, atleast a few stocks which you picked and have turned multibaggers today. you are doing a great job and best of all its FREE…not paid!!!
You meant Arjun, didn’t you? 🙂
sorry arjun, yea very much….i follow you everyday!!!please never stop posting
Dear Arjun,
I am a new fan of your website. It is much interesting to read and know who is recommending and invested in what. However, what I feel is website is dedicated to who did what 2-3 years ago and benefitted now getting xyz % return. Can you please dedicate a column on who “recently” bought what stocks with recent price. This will be much helpful in buying same stocks at rather cheap price than just knowing %return some known investor got.