Recommendation from Automobile - 2 & 3 Wheelers and Compressors / Pumps Sector

The scrips in this column have been recommended with a 15-day investment horizon in mind and carry high risk. Therefore, investors are advised to take into account their risk appetite before investing, as fundamentals may or may not back the recommendations.

ATUL AUTO LTD
CMP - ₹369.90
BSE CODE 531795
Volume 93,959
Face Value ₹5
Target ₹387 - 400
Stoploss ₹330 (CLS)

Atul Auto manufactures and sells auto rickshaws in both the domestic and foreign markets. The company, which operates across 21 states with 200 primary and 130 secondary networks, is among the fastest-growing three-wheeler businesses in India. Over 600 touch-points exist in the company’s dealership, sales, support and spare parts’ network. Considering the company’s financial performance, on a consolidated basis it reported a significant growth of 29.43 per cent from ₹102.84 crore registered in Q3FY22, recording total revenue of ₹133.11 crore in Q3FY23. When comparing the net profit for the third quarter of FY23 to the same quarter last year, it surged to ₹3.85 crore. In the last five years, the production turnover has grown by threefolds. In addition, the company reported 114 per cent growth in sales for the month of March. The shares of the company have skyrocketed more than 100 per cent over the past year, and with a 52-week high of ₹397.70 they have the potential to rise even further. Hence, we recommend BUY.

Dynamatic Technologies Ltd.
CMP - ₹2,892.80
BSE CODE 505242
Volume 1,680
Face Value ₹10
Target ₹2,970 - 3,030
Stoploss ₹2,700 (CLS)

Dynamatic Technologies is into the manufacturing of hydraulic gear pumps and automotive turbochargers and is one of the world’s largest manufacturers of these products. For the quarter ended December 31, 2022, the standalone net sales of the company fell by 1.77 per cent from last year’s same quarter to ₹141.60 crore. The EBITDA level of the company dipped 10.17 per cent from the December 2021 quarter to ₹29.33 crore. The net profit of the company slipped 42.82 per cent from the corresponding quarter last year to ₹6.73 crore. The company made an announcement recently that its subsidiary, Dynamatic Manufacturing, has signed a long-term contract with Spirit AeroSystems to manufacture and supply various aircraft components. As per the agreement, Dynamatic Manufacturing will be responsible for the production of several parts for commercial and business jet programmes at Spirit AeroSystems’ Belfast facility. Given the significance of this contract for the overall business of the company and the potential for growth, we recommend BUY