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Force Motors Ltd. (FML) recently announced its performance for the quarter ended September 30, 2021. Following are the key highlights.

Other Updates

During YTD in FY22 (April to October), the company sold 7,518 Small Commercial Vehicles (SCVs) and Light Commercial Vehicles (LCVs) as against 3,889 units in the corresponding period of previous fiscal; during the same period the company sold 4,933 Utility Vehicles (UVs), Special Utility Vehicles (SUVs) & Tractors as against 3,343 units during the corresponding period of previous fiscal – showcasing a volume growth of 93.3% and 47.6%, respectively.

of 93.3% and 47.6%, respectively. Further, during the month of October, 2021, the company sold 981 SCVs and LCVs (vs 913 units in October, 2020) and 757 UVs, SUVs, and Tractors (as against 983 units in October, 2020).

During H1 FY22, the capex incurred by the company stood at Rs.232.0 cr as against Rs.453.2 cr during H1 FY21.

The property, plant & equipment excluding capital work-in-progress (c-wip) increased from Rs.1012.7 cr as on March 31, 2021 to Rs.1,544.3 cr as on September 30, 2021; the c-wip reduced from Rs.368.7 cr to Rs.146.4 cr during the same period.

The cash and cash equivalents stood at Rs.30.5 cr as against Rs.37.0 cr while the total borrowings increased from Rs.642.3 cr to Rs.839.4 cr

During Q2 FY22, the company capitalized expenses worth Rs.18.3 cr as against Rs.31.3 cr in Q2 FY21 and Rs.20.6 in Q1 FY22.

The share of loss from the JV stood at Rs.4.8 cr as against Rs.6.0 cr in Q1 FY22 and Rs.2.3 cr in Q2 FY21.

OUTLOOK AND VALUATION

FML is a leading auto OEM and auto-ancillary company – in the OEM space, the company has carved out its own niche particularly with Traveller which commands more than 60% share in its market. The ancillary business also enjoys exclusive associations with globally renowned players like BMW, Mercedes and Rolls Royce. The company has been investing into new products and capacities and is ready to launch its first electric vehicle. The company is backed by strong pedigree of promoters and the stock is backed by robust fundamentals – good liquidity, moderate debt-equity, healthy cash flow, etc. We expect company to deliver an EPS of Rs.104.0 in FY23 and we maintain our target price of Rs.1,768 for the stock with an investment horizon of 18-24 months.

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