Force Motors

Force Motors, formerly Bajaj Tempo, is an Indian manufacturer of three-wheelers, multi-utility and cross country vehicles, light commercial vehicles, tractors, buses and heavy commercial vehicles. Q3 was a disappointing performance and that could be attributed to seasonal factor. Q4 is usually good and the company did not disappoint. It ended Q4FY15 with a 24% (YoY) rise in net sales at Rs.694 crore and a net profit of Rs.46 crore, up 2%. EBITDA came in at Rs.59 crore, up 28% while margins improved a bit from 8.13% to 8.39%. MAT credit at Rs.12 crore was similar to that it added up in Q4FY14. It ended FY15 with a consolidated net profit of Rs.101 crore, up 29%.

Looking ahead, April of current fiscal, vis-à-vis April’14 had not really begun on a very positive note. Production was up 3% of all vehicles but domestic sales was down 41% at 1953 units – apart from tractors, all others – SCV, LCV and SUV showed a drop. Exports drop of a whopping 78% can be blamed on a higher base effect as in Q4FY14, it had exported 42 SCVs against 2 SCVs and 7 SUV in current April. Hopefully, numbers will improve in the coming months. We had recommended this stock in August’14 at Rs.684, projecting it to hit four digits mark over 12 months – the target was more than achieved within 6 months itself. It continues to remain a good long term buy.