Shares of Atul Auto, one of the leading 3-wheeler companies in India, zoomed over 36% in the last one-week, with the majority of the gain occurring during Monday's trade, where the stock's value soared 15.56% to ₹532.50 apiece.
This strong uptick in shares came after Ace Investor Vijay Kedia, through his broking firm, Kedia Securities Private, bought 4,30,000 shares, or a 1.7% stake, in the company at an average price of 450 apiece on Friday. The total value of this purchase was ₹19.35 crore.
With this addition, Kedia Securities now owns a 3% stake in Atul Auto. Apart from this 3%, Vijay Kedia holds Atul Auto in his portfolio. According to Trendlyne shareholding data, the well-known investor held a 13.70% stake.
In March this year, Vijay Kedia acquired a 7.05% stake in the company by converting 50,50,505 fully convertible warrants into 16,83,502 equity shares. In addition, in Q1FY24, he picked up another 6.65% stake in the company, taking his total stake to 13.70%, or 3,569,024 shares.
Kedia's investments are closely watched by retail investors, who consider his moves as a signal for potential investment opportunities in the market.
Atul Auto is a prominent three-wheeler manufacturer based in Gujarat with a broad-based presence across segments and fuel types. The company has a presence in 21 states with 200 primary and 130 secondary networks. It has emerged as the only player with a complete range of 3Wheeler products across the fuel range: diesel, Petrol, CNG, LPG, and electric.
Earlier this month, CRISIL Ratings revised its outlook on the long-term bank facilities of Atul Auto to 'Stable' from 'Negative', while reaffirming its rating of CRISIL BBB+ to long-term bank facilities and CRISIL A2 for short-term bank facilities of the company, according to company's regulatory filing.
Over the last one year, the company shares have delivered a whopping return of 184%, appreciating in value from ₹183 to ₹519.80. In the same time period, the Nifty Auto Index has gained 20.49%.
Moreover, starting from its low point of ₹132.50 in April 2020, the stock has remarkably surged by 293% up to the present. During Monday's trading session, the stock reached a level that hasn't been witnessed since April 2016.
Meanwhile, the company's July sales improved by 11% to 2,110 units. The company recorded sales of 1,900 units in the corresponding period of last year, and in the preceding June month, it registered sales of 1,267 units.
However, for April-July (YTD), the company's sales stood at 5,193 units, down 26.91% compared to sales of 7,105 units registered in the same period of last year.
Regarding financials, the company posted a net loss of ₹10 crore for Q FY24 as against a net loss of ₹4.24 crore in Q1FY23. Its three-wheeler sales experienced a considerable decline, with the sale of 3,083 three-wheelers in Q1FY24, marking a 40.76% drop compared to the previous year's sale of 5,205 units. Notably, even when viewed sequentially, the sales showed a decline, with the company selling 7,484 units in Q4 FY23.
The decline in sales had a direct impact on the company's revenue from operations, which dropped from ₹96 crore in Q1FY23 to ₹50 crore in the June quarter, reflecting a decrease of 42%.
During the quarter, the company saw an increase in its depreciation and amortization costs, which rose to ₹3.79 crore from ₹3.01 crore in Q1FY23. Additionally, employee costs also witnessed a marginal rise, reaching ₹11 crore.
02 analysts polled by MintGenie on average have a 'buy' call on the stock.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of MintGenie.