Goa based Automobile Corporation is a manufacturer of sheet metal and bus bodies. The company mainly caters its product to Tata motors. Tata motors being the promoter of this company holds around 45 percent stake in the company. The other promoter is EDC (Economic Development Corporation of Goa) which holds about 6 percent stake in the firm.
The financial performance for FY 10 was pathetic with the bottomline of company to be around zero but the twist came in financial year FY 11 with a good performance and reporting a earning per share (EPS) of around rupees 42 and a Profit After tax (PAT) of rupees 25 Crore. During FY 11 the company made around 4800 bus bodies. The company also declared dividend of 150 percent to it investor during this fiscal year. As on 31st March the company’s 80 crore lies as ICD’s (Inter-Corporate Deposits) which are 125 rupees cash per share. For FY 12 we expect the company to post an EPS of around 40.
Currently the share is trading at 260 levels with a Price to earnings ratio of 5 and a book value of about rupees 260 by the end of FY 12. Considering its monopoly in the market and assured business the stocks seems to be very lucrative at the current levels and seems to give definite returns in the coming 8-10 months.
“Bell the bull says: The Company has a very low equity base and it had a remarkable turnaround from a zero to rupees 25 Crore bottom-line.”