Shivam Auto

Formerly known as Munjal Auto Components, the company is a full-fledged autonomous wing of the HERO Group.  Its current product offering includes different kinds of Gear Blanks, Spline Shafts, Finished Gears & Plungers. Its manufacturing plants are located in Gujarat, Haryana and Uttarakhand.

For Q2FY15, despite a 27% (YoY) rise in net sales at Rs.109 crore, the 24% jump in operating costs, 9% rise in interest outgo and tax outgo of Rs.1.29 crore led to the company posting a flat net profit of Rs.7.95 crore v/s Rs.7.73 crore in previous Q2. Even its H1FY15 growth is very flat – Rs.15.92 crore v/s Rs.15.79 crore.  EBITDA for the quarter came in at Rs.21 crore, up 17% but margins dipped from 20.93% to 19.27%.  Cash and equivalent has grown almost 12 times to Rs.6 crore.

The stock enjoys high fancy on the bourses as it comes from stables of Hero. Also given its wide product range, consistent performance, good cash flows, the stock price remains strong. Promoters stake remains high at 74.80%.  Annualised EPS is at Rs.21 (face value Rs.10) and this discounts current price by less than 3.5 times. The company has recently announced sub-division of shares and its face value will soon change to Rs.2 per share.