GS AUTO INTERNATIONAL LIMITED
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STRONG BUY:SOLID INVESTMENT
PICK
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BSE Code: 513059; GSAUTO
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Face Value:
Rs 5; CMP: Rs 25; Market Cap: Rs 36 Crore; Book Value – Rs 33 / share ; Gross
assets – Rs 71 Crore
One month Target – Rs 32-36 & Medium term Target – Rs 45
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Company Highlights
1. GS Auto
International Limited (GS Auto) was set up in 1938 and is one of the leading
manufacturers of Automotive Suspension and Fastening Components for Indian and
International Utility Vehicles, Commercial Vehicles, Multi-Axle vehicles,
Trailers and Special Purpose Vehicles.
2.
The company’s manufacturing
facilities are located in Ludhiana and Jamshedpur and are ISO QS and TS 16949
certified.
3.
GS Auto has
strong presence in OEM segment, Replacement market and Export market.
a. As an OEM vendor
it supplies material to all leading companies such as Tata Motors Limited,
Hindustan Motors Limited, Mahindra & Mahindra, Ashok Leyland, etc. OEM
sales constitute around 26% of total sales.
b. It has network of
500 dealers spread across the country to cater to Replacement market. This
segment constitutes around 66% of total sales.
c. Export market
constitutes around 8% of total sales.
CLIENTS : Very Well Known like TATA Motors, Ashok Leyland,Volvo,M&M,Maruti Suzuki,Swaraj Mazda ,Eicher,Delphi & many more....
4. The last couple
of years were tough for the auto component industry due to sluggish economy and
stagnant demand. This coupled with expansion in Jamshedpur had put severe
financial burden on the company and it went into losses in FY13 and FY14.
5. Presently the
economy is on revival mode and first round of expansion in Jamshedpur is
completed. Overall Cost of Production will be lower at Jamshedpur, due to
totally automated state of the art technology plant, lower power cost, and overall
reduction in the transportation cost. Due to this company is expected to do
very well in near future. It is expected that Company will break even in financial
performance in the present quarter and expected to do very well in further
quarters.
6.
The Company is
increasing its capacity in Ferrous casting business (a high margin business)
progressively which will further improve the margins. The Jamshedpur plant only
caters to Ferrous Casting business capacity.
7.
Recently GS Auto amalgamated
one of its group company with itself, which will ease out liquidity position of
the Company, due to money blocked in VAT refund from State Government to the
extent of Rs. 5.50 Crore.
8. To leverage the
pan India distribution network, GS auto proposes to launch its exclusive stores
by name of ‘GS Shoppe’ wherein it would sell entire range of auto components
(either manufactured at its units or outsourced) to retail clients. This will
significantly increase the margins of the company and would also further reduce
its dependence on OEM clients.
For More Details of the company go to link : www.gsauto.in
Valuation: GS Auto is trading
at P/B value of 0.75. The other players in this segment are trading at north of
P/B of 1.5. We expect the company to trade atleast at P/B multiple of 1.5,
which gives the price target of Rs. 49 per share.
Charts For information:
Financials:
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Particulars
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FY2011
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FY2012
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FY2013
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FY2014
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Sales
(Rs Crore)
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120
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131
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127
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130
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EBITDA
(Rs Crore)
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9.1
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10.5
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2.8
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7.3
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PAT (Rs
Crore)
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4.53
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4.61
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(1.26)
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(0.18)
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New Announcements Going to Come:
Now, Company is going to announce mindblowing & turnaround
results…Looking into growth of AUTO sector & companies like TATA Motors, Ashok Leyland,Volvo,M&M,Maruti Suzuki,Swaraj Mazda ,Eicher,Delphi’s growth for which GS Auto is a big supplier…..GS Auto is going to have big blasted benefits in current year….
This is A solid investment pick for each & every
investors which can give solid profit and returns in coming days to those who
has holding capacity……
Don’t
wait… just buy it immediately……n wait for healthy and safe returns…Buy before
every 2nd person is running behind this for buying…..We further advise you to take decision at your end.
Paras K.Ghelani(PG),
Shreeji Investment Hub,
Equity & Commodity Broker,
Financial Consultant & Advisor,
Corporate Financial Advisor,
Mobile No. : 090990 10827.
Email: smilestarterforu1@gmail.com
NOTE:- WE CAN CHANGE OUR VIEWS DURING MARKET HOURS LOOKING IN TO THE DIRECTION.
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Disclosure: Analyst/Author/ Astrologer may or may not have any position in any of the recommended stocks.
