Buy Autoline Industries Ltd Target Rs.106 - Sushil Finance
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Highlights from the Quarter (Q3FY22):
Autoline reported revenue of Rs. 164.6 cr for Q3FY22, up handsomely by 77.8% YoY and 21.5% on a QoQ basis. The company reported EBITDA of Rs. 13.3 for the quarter vs Rs. 2.2 cr for the same quarter in the previous year ( up 513.9% YoY) and Rs. 135.5 cr in the preceding quarter (up 10.7% QoQ). The EBITDA margin for the quarter stood at 8.1%. The company delivered a net income of Rs. 1.9 cr for the quarter at a net margin of 1.1%, translating to an EPS of Rs. 0.53.
Recent Developments:
Operational Efficiency: During the fiscal the company has taken constructive efforts to improve the bottom line by increasing asset utilization and improve employee productivity.
EV Business: The company has introduced new variants in E-Cycle and is also working on other E-Vehicles under the brand E-Speed
Expansion in South India: The company has relocated its manufacturing unit at Hosur, TN to increase its capacities due to additional business opportunities from Ashok Leyland and Daimler. The unit has already commenced operations at the new facility.
OUTLOOK AND VALUATION
Autoline has posted a strong quarter, which exceeded our expectations to the tune of ~Rs. 30 cr. The company’s efforts to consolidate their asset base and reduce the debt burden has also aided the company’s profitability. We expect Autoline to close the year on a strong note. We keep our estimates unchanged and maintain our forecasts for the company. We expect FY24E revenue of Rs. 726 cr, EBITDA of Rs. 86 cr at an EBITDA margin of 11.8% and net income of Rs. 40 cr. We estimate FY24E EPS at Rs. 10.6 and maintain our PE multiple of 10x, along with the target price of Rs. 106. We keep our BUY Rating for Autoline Industries unchanged over an investment horizon of 18-24 months showcasing an upside of 66% from the current levels.
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