Angel Broking neutral on Automotive Axles
Brokerage house Angel Broking has maintained a 'Neutral' rating on Automotive Axles in its August 20, 2013 research report.
August 27, 2013 / 13:04 IST
Angel Broking's report on Automotive Axles (ATXL)
"For 3QSY2013, ATXL's top-line posted a decline of 11.5 percent yoy (1.3 percent qoq) to Rs 161cr tracking the 16.3 percent yoy (11.5 percent qoq) decline in MHCV industry volumes. The operating margins contracted 127bp yoy to 8.6 percent as raw-material expenditure as a percentage of sales grew 250bp yoy during the quarter. Other expenditure, however, declined sharply by 18.7 percent yoy due to tight control over costs. Led by a weak operating performance, the operating profit and net profit witnessed a significant decline of 22.9 percent and 38 percent yoy to Rs 14cr and Rs 4cr respectively. On a sequential basis though, the EBITDA margin improved 140bp led by softening of commodity prices, which led to a 17.9 percent and 46.6 percent yoy jump in operating profit and net profit respectively."Outlook and valuation: "We believe that the current valuation of 8x SY2014E earnings captures the expected revival in earnings growth in SY2014. Due to limited upside from current levels, we maintain our Neutral rating on the stock," says Angel Broking research report.Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions. 
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