Top Automobile Penny Stocks In India – Analysis And Insights
Top Automobile Penny Stocks In India: Every industry is bound to feel the effects of rapid adaptability in the ever-changing landscape of technological advancements. Some companies thrive while others fail due to faster adaptability, proper implementation of ideas into reality, and the discovery of valuable economic profit, which can drive the company’s prospects and profitability. […] The post Top Automobile Penny Stocks In India – Analysis And Insights appeared first on Trade Brains.
Top Automobile Penny Stocks In India: Every industry is bound to feel the effects of rapid adaptability in the ever-changing landscape of technological advancements. Some companies thrive while others fail due to faster adaptability, proper implementation of ideas into reality, and the discovery of valuable economic profit, which can drive the company’s prospects and profitability.
One of these changes is in the automobile industry, where EVs are gaining popularity in response to climate change. Some companies that are initially considered penny stocks may become multi-baggers in the future based on industry and company growth. In this article, we will look at some Top Automobile Penny Stocks In India.
Top Automobile Penny Stocks In India
Outlook on the Automobile and Auto Component Industry:
The industry is revolutionising the changes, and EV is a new way to generate revenue from climate change issues. By 2026, the Indian automotive industry is expected to be worth $300 billion. During 2016-26, the Indian automotive industry hopes to more than fivefold its vehicle exports.
Due to supply chain changes, India can increase its share of the global auto component trade to 4-5% by 2026, reaching US$ 200 billion, and the industry’s aftermarket is expected to reach US$ 32 billion. If used properly, the chain can benefit the entire industry.
The Indian auto components industry is expected to grow by 10-15% in FY24, driven by both domestic and foreign market demand. This expansion will be aided by robust export demand, which is expected to grow at a 23.9% annual rate to US$80 billion by 2026.
On September 15, 2021, the Union Cabinet approved the PLI-Auto Scheme with a budgetary outlay of Rs. 25,938 crore for 5 years (FY2022-23 to FY2026-27) for the automobile and auto component industry.
Automobile Penny Stocks In india #1: Pritika Engineering Components
Pritika Engineering Components was incorporated in 2018. Pritika Engineering Components Limited is a wholly owned subsidiary of Pritika Auto Industries Limited. It is a Pritika Group of Industries captive unit. It has a manufacturing facility in Hoshiarpur, Punjab. The manufacturing facility consists of a combined foundry/machine shop.
Mr. R.S. Nibber founded Pritika in 1973, and it has grown from small forgings to become a renowned organisation in the tractor and automotive industries, providing excellence in the field of precision machined components made from castings.
Pritika Engineering Components Limited practices lean manufacturing, which results in less waste, higher productivity, and fewer errors. Pritika Engineering Components Ltd. is a leading manufacturer of rear axle housing castings, machined front axle support castings, machined lift housings, gear casing castings, and wheel hub castings.
The company operates and recognises revenue from a single segment, which is auto component and part manufacturing. The company earned its revenue in FY23 at Rs. 82.32 crores as compared to Rs. 53.60 crores in FY22, an increase of 53.58%. The company’s net profits were Rs. 3.27 crore in FY23, down from Rs. 5.48 crore in FY22, a 40.32% decrease.
The increase in revenue is due to a higher volume of tractors from the agribusiness sector, and the company has invested in Meeta Castings Ltd. as a wholly-owned subsidiary. In FY23, the RoE and RoCE were 11.96% and 11.28%, respectively. The debt-to-equity and interest-coverage ratios were 1.20 and 2.87 times, respectively.
Return ratios appear to be adequate, but the D/E ratio is concerning because more than half of the company is run on creditors’ funds, raising concerns about capital structure. This is the first stock in the list of Top Automobile Penny Stocks in India.
| Particulars | Amount | Particulars | Amount |
|---|---|---|---|
| CMP | ₹ 71.60 | Market Cap (Cr.) | ₹ 94 |
| Stock P/E (TTM) | 25.85 | EPS | ₹ 3.78 |
| RoE (%) | 11.96% | RoCE (%) | 11.28% |
| Promoter Holding (%) | 74.60% | Public Holding (%) | 25.40% |
| Price to Book Value (TTM) | 22.72 | Current Ratio | 1.43 |
| Enterprise Value (Cr.) | ₹ 55.45 | Net Profit Margin (%) | 3.98% |
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Automobile Penny Stocks in india #2: SM Auto Stamping Co.
SM Auto Stamping Co. was incorporated in 2006. Since 1995, SM Auto Stamping Limited (SM) has been producing precision sheet metal stamping and deep-drawn components (welded assemblies and press tools) for the automotive and engineering industries.
The group operates from three units spread over an area of 50,600 sq ft, working day in and day out to meet the ever-growing demands of our esteemed customers. It has set aside an additional 82,000 square feet of space for future growth.
The company has a track record of consistently maintaining zero rejections over a long period, demonstrating to customers the quality of their work. The company’s revenue in FY23 was Rs. 68.66 crore, up from Rs. 54.53 crore in FY22, representing a 25.91% increase. Net profits stood at Rs. 3.31 crore in FY23 as compared to Rs. 3.79 crore in FY22, a decrease of 12.66%.
In FY23, the RoE and RoCE were 16.91% and 26.86%, respectively. In FY23, D/E and interest coverage were 0.37 and 5.44 times, respectively. When compared to other companies in the same industry, both the return and debt ratios are acceptable.
According to the Independent Auditors Report in FY23, the additional changes in income and profit for the current year are due to excess depreciation charged in the previous year being considered as the prior income period in the current year, resulting in a profit overstatement.
| Particulars | Amount | Particulars | Amount |
|---|---|---|---|
| CMP | ₹ 54 | Market Cap (Cr.) | ₹ 77 |
| Stock P/E (TTM) | 0 | EPS | ₹ 0 |
| RoE (%) | 16.91% | RoCE (%) | 26.86% |
| Promoter Holding (%) | 73.12% | Public Holding (%) | 26.88% |
| Price to Book Value (TTM) | 4.2 | Current Ratio | 0.89 |
| Enterprise Value (Cr.) | ₹ 64.32 | Net Profit Margin (%) | 4.49% |
Automobile Penny Stocks in india #3: Porwal Auto Components
Porwal Auto Components was incorporated in 1992. It was providing ancillary services to Eicher Motors, now VE Commerical Vehicles. It is a Quality Castings supplier that has been recognised for its contributions to part development and supply chain management.
Porwal Auto Components Ltd. (PACL) produces a wide range of Ductile Iron, Grey Cast Iron Steel, and Steel Alloy Casting Components and Subassemblies. PACL serves a variety of industries, including automobiles, engineering, pumps and valves, agricultural and tractor equipment, construction equipment, machine tools, railways, and so on.
In FY23, the company’s revenues were Rs. 140.64 crore, up from Rs. 107.13 crore in FY22, a 31.27% increase. In FY23, net profit was Rs. -1.03 crore, compared to Rs. -0.15 crore in FY22. The loss has grown as the cost of raw materials has risen.
In FY23, the RoE and RoCE were -1.75% and 2.94%, respectively. The D/E ratio stood at 0.09 in FY23.
Over the last five years, the company’s margins have shrunk, resulting in losses. The D/E ratio is reasonable, and earnings to growth can help the company strengthen its financial position. The final stock in the list of Top Automobile Penny Stocks in India is Porwal Auto Components.
| Particulars | Amount | Particulars | Amount |
|---|---|---|---|
| CMP | ₹ 45 | Market Cap (Cr.) | ₹ 67 |
| Stock P/E (TTM) | 37.82 | EPS | - ₹ 0.68 |
| RoE (%) | -1.75% | RoCE (%) | 2.94% |
| Promoter Holding (%) | 37.17% | Public Holding (%) | 62.83% |
| Price to Book Value (TTM) | 1.16 | Current Ratio | 1.18 |
| Enterprise Value (Cr.) | ₹ 33.95 | Net Profit Margin (%) | -0.73% |
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Conclusion
As we are at the end, let us take a look at the article on the Top Automobile Penny Stocks in India in brief. These companies’ earnings are volatile, and their stock prices may not be traded in large volumes. Some penny stocks fall into the SME category and are high-risk and illiquid.
According to the appearance of smaller companies, the disclosure of some remains unreasonable to conclude, and there is little or no analyst tracking on these companies. Before investing, consult with or conduct extensive research on smaller companies.
What do you think about the developments and growth of these companies? Let us know your views in the comments section below.
Written by Santhosh
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The post Top Automobile Penny Stocks In India – Analysis And Insights appeared first on Trade Brains.
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