Best Auto Penny Stocks in India
Best automotive penny stocks in India: Every industry is bound to feel the effects of rapid adaptability in an ever-changing environment of technological advancements. Some companies succeed because of faster adaptability, proper implementation of ideas, and discovery of valuable economic benefits that can increase the company’s prospects and profitability, while others fail.
One of these changes is in the automotive industry, where electric vehicles are gaining popularity in response to climate change. Some companies that were initially considered penny stocks may become multi-baggers in the future depending on the industry and company growth. In this article, we will look at the best automotive penny stocks in India.
Best Auto Penny Stocks in India
Automotive and auto parts industry outlook:
The industry is revolutionizing change, and EVs are a new way to monetize the climate change problem. By 2026, the Indian automobile industry is expected to grow to $300 billion. During 2016-26, the Indian automobile industry hopes to increase its automobile exports by more than five times.
Supply chain changes could help India increase its share of global auto parts trade to 4-5%, reaching $200 billion by 2026, with the industry’s aftermarket size expected to reach $32 billion. When used properly, chains can benefit an entire industry.
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that much India’s auto parts industry It is expected to grow by 10-15% in FY24, driven by domestic and international market demand. This expansion is expected to grow at a CAGR of 23.9% to reach $80 billion by 2026, driven by robust export demand.
On September 15, 2021, the Union Cabinet approved the PLI-Auto Scheme with a budget outlay of Rs. 25,938 crore over five years (FY2022-23 to FY2026-27) in the automobile and auto component industry.
India’s Automotive Penny Stock #1: Pritika Engineering Components
Prettyka Engineering Components Pritika Engineering Components Limited is a wholly owned subsidiary of Pritika Auto Industries Limited. It is a subordinate unit of Pritika Group of Industries. It has a manufacturing facility at Hoshiarpur, Punjab. The manufacturing facility consists of a combined foundry/machine shop.
Mr RS Nibber founded Pritika in 1973 and it has grown from a small forging business into a renowned organization in the tractor and automobile industries, with outstanding achievements in the field of precision machined parts made by casting.
Pritika Engineering Components Limited practices lean manufacturing to reduce waste, increase productivity and reduce errors. Pritika Engineering Components Ltd. is a leading manufacturer of rear axle housing castings, machined front axle support castings, machined lift housings, gear casing castings and wheel hub castings.
The Company operates and recognizes revenue from a single segment: automotive parts and components manufacturing. In FY23, the company earned a revenue of Rs. 82.32 crores compared to Rs. It increased by 53.58% to 53.60 crores in FY22. The company’s net profit was 1 billion won. 3.27 billion in FY23, down from Rs. It declined by 40.32% to $5.48 billion in FY22.
The increase in revenue was due to increased tractor production in the agricultural sector, and the company invested in its wholly-owned subsidiary Meeta Castings Ltd. RoE and RoCE in FY23 were 11.96% and 11.28%, respectively. The debt ratio and interest coverage ratio were 1.20 times and 2.87 times, respectively.
The rate of return seems reasonable, but more than half of the company is run with creditor funds, raising concerns about the capital structure and raising concerns about the D/E ratio. This is the first stock in our list of best automotive penny stocks in India.
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India’s Auto Penny Stock #2: SM Auto Stamping Co.
SM Auto Stamping Co., Ltd. SM Auto Stamping Limited (SM) has been producing precision sheet metal stamping and deep drawing parts (welded assemblies and press tools) for the automotive and engineering industries since 1995.
The group operates out of three units spread over an area of 50,600 square feet and works daily to meet the ever-growing needs of its esteemed clientele. An additional 82,000 square feet of space has been secured for future growth.
The company has a track record of consistently maintaining zero rejection rates over long periods of time, proving the quality of its work to its customers. The company’s sales in 2023 were 150 million won. 68.66 crore, up from Rs. In fiscal year 2022, it increased by 25.91% to $54.53 billion. Net profit recorded 160 million won. 3.31 crore in FY23 compared to Rs. It decreased by 12.66% to $3.79 billion in FY22.
RoE and RoCE in FY23 were 16.91% and 26.86%, respectively. The D/E and interest coverage ratios in FY23 were 0.37x and 5.44x, respectively. Compared to other companies in the same industry, both the rate of return and debt ratio are at satisfactory levels.
According to the independent auditor’s report for FY23, the additional change in income and profit for the current year was due to overstatement of profit due to excess amortization charges charged in previous years being treated as income periods prior to the current year.
Auto Penny Stock #3 in India: Porwal Auto Parts
powal auto parts It was incorporated in 1992. auxiliary services Eicher Motors (now VE Commercial Vehicles). Quality Castings supplier recognized for contribution to component development and supply chain management.
Porwal Auto Components Ltd. (PACL) produces a wide range of ductile iron, gray cast steel and steel alloy cast parts and sub-assemblies. PACL serves a variety of industries including automotive, engineering, pumps and valves, agricultural and tractor equipment, construction equipment, machine tools, and railways.
The company’s sales in 2023 were 150 million won. 140.64 crore, up from Rs. It increased by 31.27% to ₹107.13 crore in FY22. Net profit in 2023 was 130 million won. -1.03 crore compared to Rs. -0.15 crore in FY22. As raw material prices rose, losses also increased.
In FY23, RoE and RoCE were -1.75% and 2.94%, respectively. The D/E ratio in FY23 stood at 0.09.
Over the past five years, the company has suffered losses as its margins have shrunk. The D/E ratio is reasonable and the return to growth ratio can help strengthen the company’s financial position. The last stock in our list of best automotive penny stocks in India is Porwal Auto Components.
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conclusion
At the end, let’s take a quick look at our article on the best automotive penny stocks in India. These companies’ earnings can be volatile, and their stock prices may not trade in volume. Some penny stocks fall into the SME category and are high risk and illiquid.
Looking at the picture of small and medium-sized companies, the disclosures of some companies are still unreasonable to draw conclusions, and there are few or no analysts tracking these companies. Consult with or conduct extensive research on small businesses before investing.
What do you think about the development and growth of these companies? Let us know your thoughts in the comments section below.
Written by Santosh
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