Automobile Corp

Automobile Corporation of Goa Limited (ACGL) is the manufacturer of sheet metal components, assemblies and bus coaches. It has five plants – 3 in Goa, one in Maharashtra and one in Karnataka. The company did not have a good Q3, mainly on account of its Bus Body segment which showed a 37% (YoY) drop in its topline and it posted a loss at EBIT level of Rs.4 crore compared to profit of Rs.7 crore in previous Q3. Consequently, the company ended Q3FY15, with a 28% drop in net sales at Rs.60 crore and net loss of Rs.1.15 crore v/s net profit of Rs.6.45 crore in Q3FY14 and profit of Rs.6 crore in Q2FY15.

This is a Tata group company, promoted by Telco then, which is Tata Motors now, holding 46.44% stake. The company has a Technical Collaboration Agreement with Fuji Heavy Industries Ltd., Japan, makers of Subaru car for various models of chassis mounted bus bodies and set up a full fledged Bus Body Building Division. The company had a further agreement with FHI Ltd. to build Monocoque buses. The company’s equity stands at Rs.6.42 crore and reserves is at Rs.164 crore. This stock has been recommended by us in our Stock Recommendation section. It’s a good buy at current rate with potential to touch Rs.750 over the next 8-10 months. Since average traded volume on the counter is not very high, the stock is not meant for day-to-day trading. It is a buy with a minimum time horizon of 6 months