Buy The Stock For 42% Upside In 1 Year: Ajcon Global

Brokerage firm Ajcon Global recommended buying the stocks of GNA Axles, for a target price of Rs. 1,457. GNA Axles has evolved as a leading manufacturer and supplier of a diverse range of rear axle shafts, other shafts, and spindles for light commercial vehicles medium commercial vehicles and heavy commercial vehicles etc.

Target Price

The Current Market Price (CMP) of GNA Axles is Rs. 736.05. The brokerage firm, Ajcon Global has estimated a Target Price for the stock at Rs. 1,457. Hence the stock is expected to give a 42.6% return, within 1 year.

Stock Outlook
Current Market Price (CMP)	Rs. 736.05
Target Price	Rs. 1,457
1 Year returns	42.60%

Company performance

In Q2FY22, the GNA Axles witnessed strong topline growth of 53% on YoY basis to Rs. 340 Crore. This was led by volume growth of 32% on YoY basis. Ajcon Global informed, the strong volume growth was owing to growth in exports by 56% on YoY basis. On the export front, the Company did well owing to improved demand for Class 8 and Heavy Duty trucks in South and North America. Domestically, volumes grew by 14% on YoY basis. EBITDA grew by 16% on YoY basis to touch Rs. 48 Crore in Q2FY22. EBITDA margins were under pressure led by increase in raw material prices.

Comments by Ajcon Global Services Ltd.

Maintaining a buy rating, Ajcon Global said, "The Company's topline has witnessed a CAGR of 11.62 percent over the period FY17-21 to Rs. 889.59 Crore in FY21. EBITDA registered a CAGR of 11.76% to Rs. 145.34 Crore in FY21. PAT too witnessed good CAGR of 19.25% to Rs. 70.76 Crore. PAT registered a growth of 9% on YoY basis to touch Rs. 25 Crore in Q2FY22. On QoQ basis, PAT fell by 15%. The Company has been generating positive operating cash-flows in last four years."

About the company

GNA Axles Limited is one of the world's leading manufacturers of automotive transmission components. Renowned as a niche player of the auto ancillary segment, the Company caters to light and heavy commercial and off-highway vehicles. The company has grown from 0.3 million components when it started to the production level of more than 5.1 million components in 2021.

Disclaimer

The above stock was picked from the brokerage report of Ajcon Global. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage house are not liable for any losses caused as a result of decisions based on the article.

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