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ICICI Direct Report
Atul Auto Ltd. is a prominent three-wheeler manufacturer based out of Gujarat with broad-based presence across segments and fuel types.
It is fourth largest three-wheeler player with FY21 domestic market share at 7.1% (10.3% in cargo segment and 5.1% in passenger segment). It has history of healthy capital efficiency as well as positive cash flow generation.
Key triggers for future price performance:
we build ~19%, ~22% volume, revenue compound annual growth rate, respectively, in FY21-24E on depleted base aided by economy re-opening, easing of three-wheeler financing worries,
introduction of own lithium ion three-wheeler offering would be key to combat technological disruption in the space,
post loss at profit after tax (FY21-22E), Atul Auto is seen clocking ~Rs 19 crore PAT by FY24E,
higher utilisation to spur margins, return on capital employed to ~8% levels by FY24E.
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