Fundamental Analysis

AUTOMOTIVE AXLES LTD. 

Ticker : 505010 
BUY : Rs 1,466.25
Target : Rs 1,640 

Automotive Axles Limited (AAL) manufactures drive axles, non-drive axles, front steer axles, speciality & defence axles as well as drum & disc brakes. On the standalone quarterly front, the company recorded a whopping increase in net sales and operating income being at Rs 425.56 crore for Q4FY21 as compared to net sales & operating income of Rs 168.76 crore reported for Q4FY20. The operating profit improved significantly to reach Rs 45.9 crore in Q4FY21 from Rs 15.26 crore posted in Q4FY20. The company reported a net profit of Rs 26.56 crore in Q4FY21 as compared to Rs 5.75 crore recorded in Q4FY20, exhibiting massive growth. The company’s profit ability is expected to improve over the coming quarters on the back of cost controls, new products, and commercial vehicle demand recovery. Hence, we recommend a BUY.