Pritika Auto Industries Ltd is a 45-year-old, BSE-listed company. With four factories — two in Punjab and Himachal Pradesh each — the company currently has a workforce of 1,200 employees. The company’s product line consists of all the parts used in a tractor. With big names associated with the company, Pritika Auto Industries is the OEM supplier of all tractor components.
As tractor sales are currently at an all-time high, the company has seen its sales growing by more than 40 per over the past two years.
With the government’s financial push to the agricultural sector, the company has witnessed an increase in demand in farming equipment and irrigation sectors. A good monsoon has been the proverbial cherry on the cake, with demand for these products set to increase further.
Value for money
As of March 2017, a quick look at most listed auto ancillary stocks in a similar segment as Pritika shows a tendency for these stocks to be valued at 1:1 turnover to market cap ratio. Pritika is fairly undervalued at ₹115 crore market cap, as its last year’s sales stood at ₹158 crore. In March 2018, it is set to cross ₹200 crore. In fact, half-yearly sales have already crossed the ₹100 crore mark.
The company raised close to ₹25 crore in the first half of November 2017 via the perfcap route. The promoters also invested in this allotment and increased their stake. Collectively, the company is aiming to boost its bottom line by over two per cent PAT margin taking its overall PAT margin to close to 7.5 per cent
Last year, the company declared a PAT of ₹4.27 crore and EPS of 3.15 for March 2017. This year, Pritika has already achieved a half-yearly PAT of ₹4.68 crore and a half-yearly EPS of 3.46. In short, the company exceeded last year’s annual results in the first half of 2017 itself.