The Indian automobile industry is moving at top speed, fueled by a strong demand recovery, a sharp fall in commodity prices, and a reduction in supply chain interruptions. The Nifty Auto Index so far this year has risen approximately 2,255 points to 13,191.7, a return close to 20.61 percent.
These 3 auto ancillary stocks delivered up to 65% returns in 2022
At current levels, nearly 40 percent of stocks in the index are trading near their 52-week highs. Along similar lines, small-cap auto ancillary stocks also performed well, with returns as high as 65 percent in 2022.
Shares of Schaeffler India have grown steadily since the start of the year, from ₹1,756 apiece to ₹2,772, delivering a return of 57.85 percent. Over the last three years, the stock has delivered a return of almost 225 percent. In the last decade, this multi-bagger stock has risen by 692.63 percent, surging from around ₹337 apiece to the current level of ₹2,772.
Schaeffler India is a small-cap auto ancillary stock with a market capitalisation of ₹43,844.8 crore. The company is engaged in the development, manufacturing, and distribution of high-precision roller and ball bearings, engine systems and transmission components, chassis applications, clutch systems, and related machine-building manufacturing activities.
The 52-week high and low prices for the stock were Rs. 1,522 and Rs. 3,969.8, respectively. Taking Thursday's closing price into consideration, it has risen 82.12 percent from its 52-week low.
The profitability of the company has been growing consistently for the last ten quarters. During the September quarter, the company posted a 26.11 percent jump in its standalone net profit to ₹215.4 crore as against ₹170.8 crore in the corresponding quarter of the preceding fiscal.
The company follows the January–December financial year in its accounting system. It reported a record revenue of ₹1,779.6 crore in Q3, compared to ₹1,503.3 crore in the same quarter last year.
This is another small-cap auto ancillary stock with a market capitalisation of over ₹1,805 crore. The stock gained traction in May of this year after reaching a 52-week low of ₹860 apiece and has risen 134.88 percent to hit a new 52-week high of ₹2,020 on December 1.
YTD, the stock has moved from ₹1,189.10 to the current level of ₹1,963.95, producing a return of nearly 65.16 percent. At the current market price, the stock is trading at 20.49x of its earnings, which is much lower than the industry PE of 44.46x.
The company reported a two-fold jump in its consolidated net profit at ₹32.97 crore in Q2FY23 compared to ₹15.3 crore in the year-ago quarter.
The company's revenue from operations increased by 36.54 percent to ₹624 crore, up from ₹457 crore in the previous fiscal's corresponding quarter.
The earnings per share of the company improved to ₹35.3 during the quarter from ₹16.4 in Q2 FY22. The company reported an EPS of ₹21.2 in the preceding quarter.
Lumax is into manufacturing of a range of auto-lighting equipment, including headlamps and auxillary lamp assemblies for 2, 3, and 4-wheelers, oil filters, and rear view mirrors.
The board of Lumax Industries will meet on December 7 to consider and approve the proposal to set up a new manufacturing facility at Chakan in Maharashtra and decide on funding options, CNBC TV18 reported.
The company has manufacturing plants in six states, including Haryana, Maharashtra, Karnataka, Uttarakhand, Gujarat, and Tamil Nadu. It also has an existing facility in Chakan, near Pune, report says.
NDR Auto Components
Another auto ancillary stock, NDR Auto Components, is third on the list. In the past one year, the stock has risen from ₹319.20 to its current level of ₹578.95, representing a return of 81.37 percent. So far in 2022, the stock has gained 48 percent.
Over the last three years, the stock has risen from ₹167.40 to ₹578.95 levels, generating massive returns of 245.84 percent.
The majority of the stock's gains were seen in the previous month when it increased 30 percent to reach an all-time high of Rs. 649.8 after the company reported a 154 percent jump in its consolidated net profit at Rs. 8.4 crore. The company posted ₹3.3 crore in a similar quarter of the last fiscal. Sequentially, the net profit increased by 104.87 percent.
The revenue from operations during the quarter rose by 71.92 percent to ₹94.9 crore from ₹55.2 crore in Q2 FY22. The company also recorded its highest-ever EBITDA margin of 9.48 percent during the quarter, an expansion of 320 basis points YoY.
In terms of financial ratios, the company has zero debt, Trendlyne data showed. It generated 7.19 percent and 9.15 percent ROE and RoCE, respectively, for the fiscal year ending 2022.
NDR Auto Components operates in the auto components industry and is engaged in the production and manufacturing of seat frames and seat trims for four-wheeler and two-wheeler vehicles and other accessories.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of MintGenie.
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