For private circulation only Volume No. VII Issue No. 13 Automobile Corporation of Goa Awaiting a pick-up in growth Rs 467 Sensex: 25,627 Nifty: 7,850 FINANCIAL SUMMARY SALES OPM (%) OP OTH. INC. PBIDT INTEREST PBDT DEP. PBT EO PBT AFTER EO TAX PAT EPS(Rs)* 1703 (12P) 460.7 6.5 29.95 6.94 36.88 0.55 36.33 5.98 30.35 0 30.35 10.32 20.03 31.2 1603 (12P) 418.82 6 25.14 6.87 32 0.46 31.54 5.75 25.79 0 25.79 9.03 16.76 26.1 1503 (12) 395.01 4.6 18.16 7.09 25.25 0.33 24.91 5.9 19.02-4.6 23.62 8.36 15.26 19.1 1403 (12) 302.98 8 24.09 8.09 32.18 0.2 31.98 5.4 26.59 0 26.59 9.11 17.48 27.2 1303 (12) 263.37 7.7 20.32 8.55 28.87 0.11 28.76 5.38 23.39 0 23.39 7.75 15.63 24.3 1203 (12) 332.74 10 33.32 8.33 41.65 0.14 41.51 4.73 36.78 0 36.78 11.95 24.83 38.7 *Paid up Equity capital of Rs 6.42 crore, Face Value Rs 10. EO: Extraordinary Items, EPS is calculated excluding EO. Figures in Rs crore. (P): Projections. Automobile Corporation of Goa (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.), the largest automobile manufacturer in the country and EDC Ltd (formerly known as Economic Development Corporation of Goa, Daman & Diu Ltd.). Tata Motors is the major customer of the company. The company manufactures Sheet metal components, assemblies and Bus coaches at its factories situated at villages Honda & Bhuimpal, Goa. It 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. 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. Excellent production facilities, highly skilled and continuously trained manpower of Engineers, Technicians and other staff have ensured world class products and services. In its quest towards business excellence, the company practices Integrated Management Systems including Quality, Environment, Health and Safety in all its operations. The Bus industry is one of the vital integral segments of Indian automobile industry ACGL mainly caters to bus segment and sheet metal assemblies in the industry. The Bus industry is one of the vital integral segments of Indian automobile industry. It is a common widespread public transport in India. Owing to the development of infrastructure and roads, connecting to remote places has become easier due to which more and more people are availing bus services. This has greatly contributed to the growth of the bus industry. Half the industry bus sales come from chassis where the bus body is fabricated at a coach builder such as ACGL which falls in the organised sector. A large pie of the market is dominated by the unorganised sector but with the introduction of the bus code, the organized coach building sector will be at an advantage due to mandatory type accreditation STOCK DATA BSE Code : 505036 BSE Group : XC NSE Code : Not Listed Bloomberg : ACGL IN Reuters : ATOG.BO Par Value : Rs 10 52-week High/Low : Rs 590 / Rs 380 Sector : Auto Ancillaries SHAREHOLDING PATTERN* Category % of equity Foreign : 0.02 Institutions : 2.41 Govt Holding : Corporate Holding : Promoters : 53.5 Public & Others : 44.07 * as on 31/03/2016
December 2015 quarter results- sales soar 69% and PAT sees a strong turnaround Sales for the quarter ended December 2015 soared 69% to Rs 104.56 crore. OPM jumped 970 basis points from a negative 3.1% to 6.6% which saw OP at Rs 6.95 crore against a loss of Rs 1.92 crore. Other income grew 10% to Rs 1.84 crore. Interest cost rose 17% to Rs 11 lakh. As deprecation grew 1% to Rs 1.37 crore, PBT stood at Rs 7.31 crore against a loss of Rs 1.70 crore. Provision for tax stood at Rs 2.65 crore against a write back of Rs 55 lakh after which net profit stood at Rs 4.65 crore against a loss of Rs 1.15 crore. Sales for the nine months ended December 2015 grew 6% to Rs 307.47 crore. OPM improved 150 basis points to 6.0% which saw OP rise 40% to Rs 18.45 crore. Net profit grew 35% to Rs 12.30 crore. Segment results For the quarter, sales from the Pressing Segment fell 6% to Rs 13.42 crore and accounted for 13% of sales. PBIT from the same fell 94% to Rs 4 lakh and accounted for 1% of total. For the quarter, sales from the Bus Body Segment jumped 92% to Rs 91.98 crore and accounted for 87% of sales. PBIT from the same stood at Rs 6.27 crore against a loss of Rs 3.77 crore and accounted for 99% of total. For the nine months, sales from the Pressing Segment grew 14% to Rs 48.92 crore and accounted for 16% of sales. PBIT from the same fell 37% to Rs 1.46 crore and accounted for 9% of total. For the nine months, sales from the Bus Body Segment grew 5% to Rs 261.09 crore and accounted for 84% of sales. PBIT from the same jumped 101% to Rs 14.37 crore and accounted for 91% of total. The marketing department of the Bus Body Segment continues to pursue with the potential customers and has been receiving sizeable orders of buses. The company has been giving considerable emphasis on product development to meet evolving customer expectations The company is also making all the efforts to strike a balance between the present capacity of sheet metal business and the business that could be obtained from the industry. Implementation of the national bus body building code to give a significant boost To meet the higher standards of safety and emission the Bus Body certification norms in the country are being overhauled. Uniform Bus Code will be applicable to the Company from FY 2016. According to the code drawn up by the Automotive Research Association of India (ARAI), all builders of bus bodies will have to obtain an accreditation certificate that will serve as proof of their capabilities and ability to adhere to safety norms. The implementation of the national bus body building code is being done to ensure that buses are built in accordance with the stipulated standards of safety, design and comfort. The nationwide implementation of the new code is expected to give a significant boost to bodybuilders in the organized sector like ACGL. The Bus industry is one of the vital integral segments of Indian automobile industry. It is a common widespread public transport in India. Owing to the development of infrastructure and roads, connecting to remote places has become easier due to which more and more people are availing bus services The implementation of the national bus body building code is being done to ensure that buses are built in accordance with the stipulated standards of safety, design and comfort. The nationwide implementation of the new code is expected to give a significant boost to bodybuilders in the organized sector like ACGL 2
Host of new products The company also launched new and innovative products which helped support the growth in these challenging times. Jupiter, a new complete galvanized Iron Bus Body in the range of MCV, ICV and LCV was introduced in FY 2015. The new Jupiter bus model has a modular sheet metal fascia that enables this to be used for MCV, ICV and LCV sized body variant. Jupiter Executive an AC coach has also been introduced in the staff segment that focuses on passenger comfort and safety for commuters travelling to office and back. FY 2015 also witnessed another new model from the company called Elanza in the school segment. Currently, built for export to Middle East countries, Elanza is compliant with the regulations of those countries and is equipped with safety and comfort features found on buses from international sources. It is presently built as a school bus but can be adapted for luxury and semiluxury use showcasing the flexibility of ACGL designs. The company also launched new and innovative products which helped support the growth in these challenging times. Jupiter, a new complete galvanized Iron Bus Body in the range of MCV, ICV and LCV was introduced in FY 2015 Has undertaken a project on an Amphibious Bus that runs on both land and water ACGL has also undertaken a project on an Amphibious Bus that runs on both land and water. Such a product has a huge market potential in the water tourism segment. In addition, the company is aggressively working on a range of new products that focus on segments where it has currently low presence, with a strategy to deliver solutions covering the entire product spectrum. Participation in exhibition sees good response ACGL participated in Bus World 2015 (Bus exhibition). Busworld India 2015 was organised in Mumbai. The company displayed 4 of its eye catching vehicles Elanza, Jupiter, Pleazur and a very special vehicle; an Amphibious Bus along with the Front & Rear Mock-up of the new all-metal Jupiter model. ACGL s exhibition booth received overwhelming response from Government, various State/Municipal transport agencies and the public at large. The company is very positive in using such experiences of showcasing its brand and offerings to gain more and more customers and growth in the business. Has done capex expecting promising results in the near future The company has made investments at Dharwad in terms of lease-hold land from Karnataka Industrial Area Development Board (KIADB) and a factory shed to manufacture components / sub-assemblies for buses. Management is pursuing orders from various industries in Dharwad to make its investments sustainable. The company expects promising results in the near future. Demand likely to improve With the Indian economy poised for better growth, management expects good orders for buses in the next few years. Similarly, impetus received through announcement of JnNURM scheme for procurement of buses by various state / municipal transport corporations would bring up good orders for the company. The company is in an advanced stage of equipping itself with necessary approvals and certifications necessary for manufacturing buses under the scheme. In the pressings division, the company is ready with tooling and is expecting TACGL has also undertaken a project on an Amphibious Bus that runs on both land and water. Such a product has a huge market potential in the water tourism segment 3
the OEMs to initiate their enhanced production plans once economic recovery gathers steam. At Dharwad, the management is putting all the efforts to obtain orders for automobile components and be a tier-1 supplier to OEMs. In addition, STUs, and municipal city transport would require large number of buses for augmenting their fleet. The government is moving towards implementing bus code which is aimed at strict adherence to CMVR rules for enhancing safety of passengers. Government have also assessed design and manufacturing capabilities of all body builders across the country through various institutions such as CIRT, ARAI etc. While many body builders did not come up to the levels desired by the government, ACGL has received A grade accreditation for its bus manufacturing facility. It is expected that bus orders on ACGL will improve once government mandates bus manufacturing to be made only by the accredited body builders. Some of the positive factors like expected growth in IT and Healthcare sector, positive sentiments on GDP, growth coming from rural penetration of schools and increased need for rural transport, advent of smart cities that would fuel demand for transportation resulting in demand for midi and MCV buses, expected growth in service sector and staff hiring, cool off in fuel pricing that would increase operator profitability would increase demand of fully built buses in the future. Some of the positive factors like expected growth in IT and Healthcare sector, positive sentiments on GDP, growth coming from rural penetration of schools and increased need for rural transport, advent of smart cities that would fuel demand for transportation resulting in demand for midi and MCV buses Valuation For FY 16, we expect the company to register net sales and PAT of Rs 418.82 crore and Rs 16.76 crore respectively. For FY 17, we expect the company to register net sales and PAT of Rs 460.70 crore and Rs 20.03 crore. This gives an EPS of Rs 26.1 for FY 16 and Rs 31.2 for FY 17. At current market price of Rs 467, the scrip trades at 15 times expected FY 17 earnings. AUTOMOBILE CORPORATION OF GOA: RESULTS 1512 (3) 1412 (3) VAR. (%) 1512 (9) 1412 (9) VAR. (%) 1503 (12) 1403 (12) VAR. (%) Sales 104.56 61.83 69 307.47 289.96 6 395.01 302.98 30 OPM (%) 6.6-3.1 6.0 4.5 4.6 8.0 OP 6.95-1.92 LP 18.45 13.17 40 18.16 24.09-25 Other inc. 1.84 1.68 10 4.99 5.28-6 7.09 8.09-12 PBIDT 8.79-0.24 LP 23.44 18.45 27 25.25 32.18-22 Interest 0.11 0.09 17 0.28 0.20 42 0.33 0.20 68 PBDT 8.68-0.33 LP 23.16 18.25 27 24.91 31.98-22 Dep. 1.37 1.37 1 4.13 4.33-4 5.90 5.40 9 PBT 7.31-1.70 LP 19.03 13.92 37 19.02 26.59-28 EO 0.00 0.00 0.00 0.00-4.60 0.00 PBT after EO 7.31-1.70 LP 19.03 13.92 37 23.62 26.59-11 Tax 2.65-0.55 PL 6.73 4.79 41 8.36 9.11-8 PAT 4.66-1.15 LP 12.30 9.13 35 15.26 17.48-13 EPS (Rs)* # # # # 19.1 27.2 * Paid up equity capital is Rs 6.42 crore. Face value Rs 10. #EPS can not be annualized due to seasonality in business LP: Loss to Profit PL: Profit to Loss. EO: Extraordinary items. EPS excludes EO and relevant tax. Figures in crore 4
AUTOMOBILE CORPORATION OF GOA: SEGMENT RESULTS SEGMENTS 1512 1412 VAR. % TO 1512 1412 (9) VAR. % TO 1503 1403 VAR. % TO (3) (3) (%) TOTAL (9) (9) (%) TOTAL (12) (12) (%) TOTAL Sales Pressing Segment 13.42 14.34-6 13 48.92 42.77 14 16 60.16 48.61 24 15 Bus Body Segment 91.98 47.85 92 87 261.09 248.89 5 84 337.04 256.18 32 85 TOTAL 105.40 62.19 69 100 310.01 291.65 6 100 397.20 304.79 30 100 Less: intersegment sales 0.84 0.36 2.54 1.69 2.19 1.81 Add: Unallocable sales 0.00 0 0.00 0.00 Net Sales 104.56 61.83 307.47 289.96 395.01 302.98 PBIT Pressing Segment 0.04 0.69-94 1 1.46 2.30-37 9 5.67 3.42 66 30 Bus Body Segment 6.27-3.77 LP 99 14.37 7.14 101 91 13.16 17.19-23 70 TOTAL 6.32-3.08 LP 100 15.83 9.44 68 100 18.83 20.60-9 100 Less interest 0.11 0.09 0.28 0.20 0.33 0.20 Less unallocable expenditure net of inc. -1.10-1.47-3.48-4.68-5.11-6.18 Less unallocable EO PBT 7.31-1.70 19.03 13.92 23.61 26.59 Capital Employed Pressing Segment 27.86 26.78 4 15 27.86 26.78 4 15 29.87 28.97 3 17 Bus Body Segment 81.12 96.44-16 44 81.12 96.44-16 44 97.56 79.21 23 56 Add: Unallocable 75.96 54.91 38 41 75.96 54.91 38 41 47.14 62.67-25 27 TOTAL 184.94 178.13 4 100 184.94 178.13 4 100 174.57 170.85 2 100 Figures in crore 5