| Autoline Industries Improving its capabilities
Derives 82% of sales from Tata Motors Autoline Industries supplies complex sheet metal assemblies and sub-assemblies to Tata Motors, Bajaj Auto, Kinetic Engineering, Mahindra & Mahindra, Walker Exhaust and Fiat India. The company is the single-source supplier of load bodies for Tata Ace mini truck. It has entered into an arrangement with Stokota Engg, the Indian subsidiary of Stokota NV, Belgium, for supply of tippers, tipper trailers, tankers, cement bulkers, and garbage extractors. The promoters of Autoline Industries are Vilas Lande (sitting MLA from Haveli constituency in Pune), Shivaji Akhale, Sudhir Mungase, M Radhakrishnan and his wife. To modernize and upgrade the existing facilities at Chakan, set up a new manufacturing unit at Chankan, expand the UAE joint venture operation, expand facilities in design engineering unit, establish corporate office, make strategic acquisition and meet issue expenses, Autoline Industries is issuing equity shares through the 100% book building process to raise Rs 75 crore. . Strengths * Major customer Tata Motors is doing well, specially the Ace LCV model for which the Autoline Industries is the single-source supplier. * The integrated inhouse facilities of the company cater from design engineering stage to delivery of the final product. * Positioned as a leading provider of services to overseas manufacturers looking for outsourcing developmental work and design engineering services, the company is expanding the capabilities of its design-engineering unit to supply offshore development and manufacturing (ODM) services to foreign companies. Weakness *The cost-reduction targets stipulated by Tata Motors, accounting for 82% of Autoline Industries’ sales, are likely to put pressure on the profit of Autoline Industries. The 9.8% operating profit margin in the latest eight-month period is lower than 11.9% in FY 2006. Valuation In the past year, Autoline Industries has issued shares on preferential basis at Rs 50 to Rs 130 per share. At the current offer price band of Rs 200 - Rs 225, the annualised EPS for the eight months ended November 2006 on post-issue equity works out to Rs 10.6 to Rs 10.4, and PE 19.2x – 21.3x. The TTM PE of auto ancillary industry is 13.8x. | Autoline Industries: Issue Highlights | | Sector | Auto Ancillary- Others | | Sector TTM P/E | 13.83 | | No. of shares on offer (lakh) | 37.5 lakhs to 33.33 lakhs | | Price band (Rs) | 200-225 | | Post-issue equity (Rs crore) | Rs 10.36 crore to 10.78 crore | | Post-issue promoter stake (%) | 28.85 to 30.01 | | Issue open date | 8th Jan 2007 | | Issue close date | 12th Jan 2007 | | Listing | NSE, BSE | | Rating: | 44/100 | | Autoline Industries: Financials | | | 0203(12) | 0303(12) | 0403(12) | 0503(12) | 0603(12) | 0611(8) | | Sales | 21.24 | 27.29 | 51.08 | 68.48 | 96.7 | 118.28 | | OPM (%) | 11.8 | 9.3 | 5.9 | 7.3 | 11.9 | 9.8 | | OP | 2.5 | 2.55 | 3.02 | 4.97 | 11.48 | 11.58 | | Other Income | 0.09 | 0.13 | 0.11 | 0.11 | 0.09 | 0.09 | | PBIDT | 2.59 | 2.68 | 3.13 | 5.08 | 11.57 | 11.67 | | Interest (Net) | 1.33 | 1.36 | 1.55 | 1.62 | 1.76 | 1.5 | | PBDT | 1.26 | 1.32 | 1.58 | 3.46 | 9.81 | 10.17 | | Depreciation | 0.56 | 0.75 | 0.99 | 1.48 | 2.11 | 1.72 | | PBT | 0.7 | 0.57 | 0.59 | 1.98 | 7.7 | 8.45 | | EO | 0 | 0 | 0 | 0 | 0 | 0 | | PBT | 0.7 | 0.57 | 0.59 | 1.98 | 7.7 | 8.45 | | Provision for tax | 0.03 | 0.05 | 0.05 | 0.16 | 0.69 | 0.97 | | Prior period adjustment | 0.24 | 0 | 0 | 0 | 0 | 0 | | PAT | 0.43 | 0.52 | 0.54 | 1.82 | 7.01 | 7.48 | | EPS*( at lower band) | 0.6 | 0.5 | 0.5 | 1.7 | 6.5 | 10.4 | | EPS@ (at higher band) | 0.6 | 0.5 | 0.5 | 1.7 | 6.6 | 10.6 | *Annualised on post-issue equity of Rs10.78 crore( at lower band)
@Annualised on post-issue equity of Rs 10.36 crore ( at higher band)
Face Value of Rs 10
EPS is calculated after excluding EO and relevant tax
Figures in Rs crore
Source: Capitaline Corporate Database | |