GNA Axles Ltd., incorporated in the year 1993, is a Small Cap company (having a market cap of Rs 832.86 Crore) operating in Auto Ancillaries sector.
Financials
For the quarter ended 31-12-2020, the company reported a Consolidated Total Income of Rs 276.29 Crore, up 24.21 % from last quarter Total Income of Rs 222.43 Crore and up 28.82 % from last year same quarter Total Income of Rs 214.47 Crore. Company reported net profit after tax of Rs 26.64 Crore in latest quarter.
Investment Rationale
GNA Axles is one of the leading suppliers of rear axles to the Auto industry and is expected to be one of the biggest beneficiaries of the revival in the CV cycle. The company derives 60% of its revenues from exports while the balance 40% of the company’s revenues comes from the domestic market. GNA is expected to be one of the biggest beneficiaries of strong growth outlook for truck sales in US and Europe markets which are witnessing strong recovery in demand. US which accounts for almost 40% of the company’s revenues has been registering strong class 8 truck sales. At current level the stock is trading at a P/E multiple of 9xFY23E,given inexpensive valuations we believe that the stock offers value at current levels and recommend a BUY on the company.
