Atul Auto tumbles on account of lower auto sales

Atul Auto’s vehicle sales have dropped by more than half to 1242 units in month of April 2016. The company had sold 2502 units in the same month last year. Its totals unit sales have declined due to higher Value Added Tax (VAT), which impacted sales in the state of Gujarat.

Gujarat government hiked VAT on motor vehicles sold to dealers from 15 per cent to 20 per cent with effect from April 1. According to Atul Auto’s management, increment in VAT resulted in tax irregularity by 5 per cent. Therefore, despite pending orders, dealers have suspended taking delivery of vehicles from 1st April, 2016. This has impacted company’s sales in Gujarat resulting into this shortcoming. This scenario may continue till the above situation is resolved.

The share price of Atul Auto has declined by 7.05 per cent on bourses in early trades; and is trading at Rs 488 on an intraday basis.

Atul Auto is engaged in the business of automobile products. The company is a manufacturer of three-wheeler commercial vehicles in the state of Gujarat. Its categories of products include goods carriers, passenger carriers and special purpose vehicles. Atul Auto manufactures three-wheelers in the one ton category targeting the passenger and cargo segment. The company produces auto rickshaws under Atul Shakti, Atul Smart, Atul Gem and Atul Gemini-Dz brand names. It is also engaged in the generation of electricity with wind turbine generators at village Gandhavi, based out of Gujarat.