PORWAL AUTO COMPONENTS LTD (532933) - STOCK OF THE WEEK

Dear Friends, Today I am expressing my view on one Auto ancillary stock.

PORWAL AUTO COMPONENTS LTD (532933)

Porwal Auto Components Ltd. (PACL) is ISO 9001:2008 and ISO/TS 16949:2009 certified by TUV NORD Company, involved in the manufacture of a variety of Ductile Iron, Grey Cast Iron Steel and Steel Alloy Casting Components and Subassemblies. PACL manufactures automotive components to various sectors including Automobile, Engineering, Pumps and Valves, Agriculture and Tractor Equipment’s, Construction Equipments, Machine Tools, Railways etc.

Porwal Auto Components Ltd. was incorporated in the year 1992, and commercial production started in the year 1995.Initially  as an ancillary to M/s. Eicher Motors Limited now VE Commercial Vehicles Ltd. (A Volvo Group and Eicher Motors joint venture).

Company products are mainly falling under following categories.

1.    Automobile

2.    Products for Railways & BHEL

3.    Heavy Casting

4.    Earth moving

1.    Automobile.

There are number of products are manufactured by the company in this category. Which mainly includes following.

A.   Axel parts – This category includes Drum brakes, Rear wheel hubs, front wheel flanges etc.

B.   Chasis Parts – This segment mainly includes H shackle points, Lever for engine control, Lever anchor etc.

C.   Engine Parts – Exhaust manifold, outlet flanges are major products on this category.

D.   Transmission Parts- Different types of case transmissions, Gear case timings are being manufactured by PACL in this segment.

E.   Differancial Parts – Bearing retainers, front wheel flanges Through drive housing are from this segment.  

2.    Railways & BHEL

This is high demand products for Indian Railways & BHEL. Following are the major products in this category. It mainly include Axel Box housing, Suspension Tube, Cylinder brackets. Etc.

3.    Heavy casting

This segment contains mainly heavy pipe fittings etc.

4.    Earth Moving

Different combination of Lube oil pump, Link loader are being manufactured in this category.

CLIENTS

Company is having Major clients of Indian Railways, BHEL and other auto majors. Few of the major customers are as follows.

Company website: Clickhere

FINANCIALS AND OUTLOOK

Company shares are trading in BSE. Promoter holding in company 37.14%

Company posted 24.98 Cr top line in June Qtr.

Net profit is 1.65 Cr bottom-line in June Qtr.

Stock is trading at par PE compared to industry & its major peers.

Debt to equity ratio is 0.15

Stock is trading at Rs 40

Company is mainly engaged in the business manufacturing of Auto components to major customers like Indian railways, BHEL, JCB , TATA MOTORS etc . Company is having diversified product portfolio in Auto ancillary segment. Govt. push to railways and automobile sector revival is a huge positive for the stock. Company is enjoying good operating margins and reducing debts are indicators for future potential for the company.

Considering above and performance of the company stock will rerate and will give handsome returns to the investors in near future.

NOTE : THE ABOVE IS NOT A RESEARCH REPORT NOR A RECOMMENDATION  BUT INFORMATION AS AVAILABLE ON PUBLIC DOMAIN. 

Registration status with SEBI: I am not registered with SEBI under the (Research Analyst) regulations 2014 and as per clarifications provided by SEBI: “Any person who makes recommendation or offers an opinion concerning securities or public offers only through public media is not required to obtain registration as research analyst under RA Regulations”