IndiaNivesh has has recommended five mid-cap stocks for investment on the basis that they offer potential for good upside
IndiaNivesh has has recommended five mid-cap stocks for investment on the basis that they offer potential for good upside
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The management expects double digit volume growth for FY17E. During FY16 overall volumes of the company grew by 5.5% YoY (vs flat 3W industry growth) to 33893 units. Domestic volumes registered growth of 5.5% YoY (vs 1.03% growth of domestic 3w Industry). We believe Atul Auto is likely to benefit from increase in rural income and spending on the back of good monsoon expected in this year. The company has a strong presence in semi rural and rural market. EBITDA margins expanded in FY16 mainly due to operational efficiencies and lower input cost. The company recorded highest ever EBITDA margins (14%) in FY16 and expects 50‐100 margin expansion in next two years due to benefit of operating leverage.
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Atul Auto is a kind of slow growing company where in FY15 we can find some uncertainties were there in the performance of the company. Considering the drill in urban as well as in rural area, the company can turn out to be multibagger as well in coming years. Fundamentals are up and down over the quarters but looking strong enough to keep the momentum from here on for the company.
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