Double Income Alert: Hop into this Three-Wheeler Manufacturer - Views on News from Equitymaster

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  • Nov 27, 2019 - Double Income Alert: Hop into this Three-Wheeler Manufacturer

Double Income Alert: Hop into this Three-Wheeler Manufacturer

Nov 27, 2019

Even as the Sensex is setting one record after another, the Small and Mid Caps haven't quite set the stage on fire.

A lot of the good quality ones among them are still 50%-60% off from their recent highs and have come off only marginally from their multi-year lows.

And although this is disappointing for someone who's holding on to these stocks for long, it is a welcome opportunity for those looking to build a long-term portfolio of quality stocks.

One such candidate for a portfolio of this kind is the 3-wheeler manufacturer Atul Auto Ltd.

Amongst the fastest growing 3-wheeler companies in India, Atul Auto has a presence across 21 states with 200 primary and 130 secondary networks. The company has an installed capacity of 60,000 units per annum and it caters to diverse customer base in the cargo and passenger segment. Available in 350 kg and 500 kg payload capacity, its products offer multi-fuel choice i.e. Diesel, Petrol, CNG, LPG and e-vehicles.

The company has a 17% market share in the cargo segment and 4% in the passenger segment, taking its overall market share in the domestic industry to 6%.

The company had a good FY19 where consolidated profits grew 14% on the back of a 17% growth in topline. And although the company is having a tough FY20 in line with other auto companies, a 15% bottomline growth on the back of a 2% topline growth for the first half is still commendable in my view.

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