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    Buy Automotive Axles, target price Rs 1550: Axis Securities

    Synopsis

    Automotive Axles Ltd. key Products/Revenue Segments include Automobile Products & Accessories, Scrap & Others, Other Operating Revenue and Wind Power for the year ending 31-Mar-2021.

    buy
    Promoters held 71.04 per cent stake in the company as of 30-Sep-2021, while FIIs owned 0.83 per cent, DIIs 13.63 per cent.
    Axis Securities has buy call on Automotive Axles with a target price of Rs 1550. The current market price of Automotive Axles Ltd. is Rs 1356.9.
    < Time period given by analyst is one year when Automotive Axles Ltd. price can reach defined target.
    Automotive Axles Ltd., incorporated in the year 1981, is a

    Small Cap company (having a market cap of Rs 2049.33 Crore) operating in Auto Ancillaries sector.

    Automotive Axles Ltd. key Products/Revenue Segments include Automobile Products & Accessories, Scrap & Others, Other Operating Revenue and Wind Power for the year ending 31-Mar-2021.


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    Financials
    For the quarter ended 30-09-2021, the company reported a Standalone Total Income of Rs 309.98 Crore, up 21.04 % from last quarter Total Income of Rs 256.10 Crore and up 81.08 % from last year same quarter Total Income of Rs 171.19 Crore. Company reported net profit after tax of Rs 10.14 Crore in latest quarter.

    Investment Rationale
    The brokerage expects the company’s profitability to improve over the next 2-3 years, supported by the cost controls, new products, and the CV demand recovery. The return ratios are also expected to improve in light of an improvement in profitability. It has tweaked estimates for FY22E/FY23E lower given the weak H1FY22 results and slow CV volume pick-up but it remains bullish on the company’s long-term prospects. Company is focusing on growth through its Mission 25 strategy of growing revenues, enhancing profitability, new business wins, generating operating excellence, and creating customer value. It retains a BUY rating on the stock assigning a multiple of 17x FY23E EPS to arrive at a target price of Rs 1,550/share (12% upside) on the back of the CV recovery cycle, new products, and cost rationalisation.

    Promoter/FII Holdings
    Promoters held 71.04 per cent stake in the company as of 30-Sep-2021, while FIIs owned 0.83 per cent, DIIs 13.63 per cent.



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    (What's moving Sensex and Nifty Track latest market news, stock tips and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .)

    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.

    Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

    ...more
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