Any current/future new fundraising through debt or equity?

For CAPEX, the company has already incurred close to Rs. 50 crores for land acquisition at Greenfield expansion. The balance Rs. 100 crores is likely to be incurred over the next two years (FY18 and FY19). For FY17, no large CAPEX is planned; the company intends to fund expansion through internal accruals only. No specific mention of new fundraising through debt or equity was made during the call. The company emphasizes utilizing internal accruals for upcoming investments. No indications of external financing or capital raising initiatives were disclosed.

Any current/future capex/capital investment/strategic investment?

The company has already incurred close to Rs. 50 crores for land acquisition for a Greenfield expansion. An additional Rs. 100 crores is planned to be spent over the next two years (FY18 and FY19). For FY17, no large CAPEX is expected; the expenditure will be internal accrual funded. Project work for new facilities is expected to start around March-April 2017. Commercial production from the new facility is planned to commence by FY19 (around April 2018). Investments in R&D are modest, around Rs. 4-5 crores annually, focusing on upgrading products rather than major new developments. No signific

Future growth expectations in sales/revenue/volumes?

The company targets minimum double-digit volume growth for the second half of FY `17 despite external uncertainties. (Page 7) Positive momentum in demand is expected to continue for the rest of the year due to good monsoon and positive economic environment. (Page 2) The shortfall in first half FY `17 volumes compared to previous year is expected to be covered soon; strong sales since August indicate improving trends. (Page 2) Electric three-wheeler market potential is large (120,000 units annually); company aims to capture 10-20% market share adding 20,000-25,000 units to volume. (Page 10) The

Future growth expectations in earnings/operating earnings/profits/EPS?

The company targets minimum double-digit volume growth for the second half of FY `17 (Page 7). Confident of ending FY `17 with positive numbers, expecting 5-10% growth in vehicle sales for the remaining part of the year (Page 8). Net profit for the quarter increased by 175.65% Quarter on Quarter, indicating strong operating performance (Page 3). EBITDA margin improved to 16.10% versus 15.73% in the corresponding quarter last year; gross contribution improved to 28% from 27.03% (Page 3). EPS for the quarter stood at Rs. 6.29 per share, maintaining steady earnings (Page 3). Management expects ot

Current/ Expected Orderbook/ Pending Orders?

The transcript does not explicitly mention the current or expected order book or pending orders. However, management discussed sales volumes: approximately 3,000 electric three-wheelers sold in select pockets during the seeding phase. Expectation of double-digit growth in volume for FY17. Monthly sales reached a record high with over 5,000 vehicles sold in October. Electric three-wheelers potential market size is around 120,000 units annually with a target to capture 10-20% share. New Greenfield expansion project work planned from March-April 2017 with commercial production starting FY19, indi

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Atul Auto LtdQ3 FY17Agricultural, Commercial & Construction Vehicles

Atul Auto Ltd Q3 FY17 Earnings Call Analysis

Revenue, margin, capex, fundraise and order book outlook from management commentary.

Price: ₹483P/E: 33.3Market Cap: ₹1.4K CrSector: Agricultural, Commercial & Construction Vehicles

Management growth scorecard

Revenue

Category 3

Margin

Category 3

Fundraise

Order

N/A

Capex

Yes

1 of 4 growth signals are positive — mixed outlook.

Full analysis

Revenue guidance

Category 3

→The company targets minimum double-digit volume growth for the second half of FY `17 despite external uncertainties. (Page 7)
→Positive momentum in demand is expected to continue for the rest of the year due to good monsoon and positive economic environment. (Page 2)
→The shortfall in first half FY `17 volumes compared to previous year is expected to be covered soon; strong sales since August indicate improving trends. (Page 2)
→Electric three-wheeler market potential is large (120,000 units annually); company aims to capture 10-20% market share adding 20,000-25,000 units to volume. (Page 10)
→The company is confident to end the fiscal year on a positive note in volume terms. (Page 7)
→Exports currently contribute about 3% of revenue, with focus on smaller international markets for consistent volume growth. (Page 11, 5)
→Expansion plans include starting new project work by March-April 2017 with commercial production from FY `19 to meet growing demand. (Page 11)

Margin guidance

Category 3

→The company targets minimum double-digit volume growth for the second half of FY `17 (Page 7).
→Confident of ending FY `17 with positive numbers, expecting 5-10% growth in vehicle sales for the remaining part of the year (Page 8).
→Net profit for the quarter increased by 175.65% Quarter on Quarter, indicating strong operating performance (Page 3).
→EBITDA margin improved to 16.10% versus 15.73% in the corresponding quarter last year; gross contribution improved to 28% from 27.03% (Page 3).
→EPS for the quarter stood at Rs. 6.29 per share, maintaining steady earnings (Page 3).
→Management expects other expenses to revert back to normal levels, which should support margin stability (Page 18).
→Investment in R&D is consistent but not very high (~Rs. 4-5 crores annually), focusing on sustaining product upgrades (Page 16).
→Electric vehicle segment presents growth opportunity with potential to add volumes and expand product basket (Pages 7, 10).

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Fundraise plans

→For CAPEX, the company has already incurred close to Rs. 50 crores for land acquisition at Greenfield expansion.
→The balance Rs. 100 crores is likely to be incurred over the next two years (FY18 and FY19).
→For FY17, no large CAPEX is planned; the company intends to fund expansion through internal accruals only.
→No specific mention of new fundraising through debt or equity was made during the call.
→The company emphasizes utilizing internal accruals for upcoming investments.
→No indications of external financing or capital raising initiatives were disclosed.

Order book

→The transcript does not explicitly mention the current or expected order book or pending orders.
→However, management discussed sales volumes: approximately 3,000 electric three-wheelers sold in select pockets during the seeding phase.
→Expectation of double-digit growth in volume for FY17.
→Monthly sales reached a record high with over 5,000 vehicles sold in October.
→Electric three-wheelers potential market size is around 120,000 units annually with a target to capture 10-20% share.
→New Greenfield expansion project work planned from March-April 2017 with commercial production starting FY19, indicating anticipation of increased orders.
→Export orders remain insignificant currently, at about 3% of revenue.
→The company is focusing on expanding dealership networks and markets to grow sales and order inflow.

Capex plans

Yes

→The company has already incurred close to Rs. 50 crores for land acquisition for a Greenfield expansion.
→An additional Rs. 100 crores is planned to be spent over the next two years (FY18 and FY19).
→For FY17, no large CAPEX is expected; the expenditure will be internal accrual funded.
→Project work for new facilities is expected to start around March-April 2017.
→Commercial production from the new facility is planned to commence by FY19 (around April 2018).
→Investments in R&D are modest, around Rs. 4-5 crores annually, focusing on upgrading products rather than major new developments.
→No significant CAPEX for electric vehicle setup is needed as existing infrastructure suffices, with expenditures well below Rs. 5 crores.

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1Atul Auto Ltd

Rev 3Mar 3

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