04

COMPANY PROFILE

Founded in the year 1947, GNA group started its operations in Punjab. It was the year in which our country attained freedom and in the following years, GNA has achieved milestones as the country has progressed. Recognized as the group’s flagship manufacturing concern, GNA Axles Ltd; is a name that has made its existence felt in the world of auto-parts, with latest products and technology. The company has one of the largest integrated plants of its class in the subcontinent of Asia with a yearly revenue exceeding $105 million (approximately) coming from its units namely GNA Axles Ltd (Axles Division), GNA Dura parts (Gears Division) and GNA Udyog Ltd (Propeller Shafts Division).

AUTO ANCILLARIES INDUSTRY IN INDIA

·        The Indian auto-components industry has had a healthy growth over the last few years and is prolonged by a CAGR of 3.28% from FY16 to FY20 to arrive at US$ 45.90 billion in FY21 (approximately).

·        Due to the high development prospects in all segments of the vehicle industry, the auto component sector is expected to rise by double digits in FY22.

·        The industry accounts for 2.3% of India’s Gross Domestic Product and provides work for as many as 1.5 million populace (approximately).

·        The Government of India’s Automotive Mission Plan 2006-2016 has come a long way in ensuring growth for the sector. The trade is expected to achieve a turnover of US$ 300 billion (approximately) by 2026 and will grow at a CAGR of 15% from its current revenue of US$ 74 billion (approximately).

·        As per Automobile Component Manufacturers Association, automobile components export from India is expected to reach US$ 80 billion (approximately) by 2026.

·        The Foreign Direct Investment inflow into Indian automotive industry during the period April 2000-June 2021 stood at US$ 30.51 billion (approximately) as per the data released by Department for Promotion of Industry and Internal Trade.

·        In September 2021, the Indian government issued notification regarding a Production Linked Incentive scheme for automobile and auto components worth Rs. 25,938 crore (approximately). This scheme is expected to bring investments of Rs. 42,500 (approximately) by 2026.

VALUATION

BALANCE SHEET

SHARE HOLDING PATTERN

CHART - SHARE PRICE MOVEMENT – 1 YEAR

Note: Prices from December 2020 has been considered to chart the graph.

COMPANY PERSPECTIVE AND REVIEW

·        GNA Axles has evolved as a leading manufacturer and supplier of a diverse range of auto ancillary products starting from light commercial vehicles, medium commercial vehicles and heavy commercial vehicles.

·        In Q2FY22, GNA Axles witnessed strong top line growth of 53% on YoY basis which was led by volume growth of 32% on YoY basis (approximately). The strong volume growth was owing to growth in exports by 56% on YoY basis which, in turn, was fuelled by the improved demand for Class 8 and Heavy Duty trucks in South and North America. In future also, GNA is expected to be one of the principal beneficiaries of strong growth outlook for truck sales in the US and European markets.

·        Domestically, capacity grew by 14% on YoY basis. EBITDA grew by 16% on YoY basis to touch Rs. 48 Crore in Q2FY22 (approximately).

·        GNA is a strong brand, enjoys long term relationships with clients and has healthy financials. It enjoys leadership position in the domestic market and has significant presence in key global economies. All of these, coupled with a positive industry outlook and reasonable valuations, the company merits investor’s interest, particularly for the long term portfolio.