Buy Atul Auto, target price Rs 260: Emkay Global

Emkay Global has buy call on Atul Auto with a target price of Rs 260. The current market price of Atul Auto Ltd. is Rs 186.1. Time period given by analyst is one year when Atul Auto Ltd. price can reach defined target.

Atul Auto Ltd., incorporated in the year 1986, is a Small Cap company (having a market cap of Rs 408.47 Crore) operating in Auto sector.

Financials
For the quarter ended 31-03-2021, the company reported a Consolidated Total Income of Rs 91.56 Crore, down -10.34 % from last quarter Total Income of Rs 102.12 Crore and down -18.95 % from last year same quarter Total Income of Rs 112.97 Crore. Company reported net profit after tax of Rs -5.28 Crore in latest quarter.

Investment Rationale
To strengthen its presence in the market, company’s efforts continue on: 1) increasing penetration in CNG/LPG segment; 2) improving credit access through its finance arm; 3) increasing presence in key export markets; 4) new products; and 5) expanding distribution reach. The brokerage revises TP from Rs 275 to Rs 260 (10x FY23E EPS).

Promoter/FII Holdings
Promoters held 52.7 per cent stake in the company as of March 31, 2021, while FIIs held 1.4 per cent, DIIs 5.9 per cent and public and others 40 per cent.