Firstcall research report on Automobile Corporation of Goa
Automobile Corporation of Goa Ltd. (ACGL), the first major engineering unit to be set up in Goa, a tiny but picturesque state of India, was jointly promoted in 1980 by Tata Motors Ltd (formerly known as Tata Engineering & Locomotive Co. Ltd.), and EDC Ltd (formerly known as Economic Development Corporation of Goa , Daman & Diu Ltd.). Right from the inception, ACGL, with its emphasis on Quality, Safety, Productivity and Reliability in line with the Tata ethos has been endearing itself to its customers. The Company is in operation since 1982 and is a major supplier of pressings and assemblies to Tata Motors' Pune factory. To meet “Just in Time” supplies to the customer, the Company has set up a Press shop at Jejuri, Pune.
The Sheet Metal Division at its three units has High tonnage presses with an output of more than 17,620 tonnes that have ensured complete customer satisfaction.
In 1987, the Company entered into 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 in 1995.
>>At the current market price of Rs. 476.50, the stock P/E ratio is at 14.36 x FY15E and 12.31 x FY16E respectively.
>>Earning per share (EPS) of the company for the earnings for FY15E and FY16E is seen at Rs.33.18 and Rs.38.72 respectively.
>>Net Sales and PAT of the company are expected to grow at a CAGR of 20% and 17% over 2013 to 2016E respectively.
>>On the basis of EV/EBITDA, the stock trades at 7.82 x for FY15E and 6.71 x for FY16E.
>>Price to Book Value of the stock is expected to be at 1.68 x and 1.59 x respectively for FY15E and FY16E.
We recommend ‘BUY’ in this particular scrip with a target price of Rs.543.00 for Medium to Long term investment.
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