Saturday, September 7, 2013

LUMAX AUTO TECHNOLOGIES LTD - LONG TERM BUY




 

  
Sharp crashes in market always creates panick situations ,especially in retail investors . Main reason for such a fear is – investment using leveraged funds and lack of conviction and confidence in  the company where  we invested.Only a small minority loving such crashes and taking it as an opportunity to buy quality companies at cheap rates.We must realise that the share price of any company depends mainly on two factors – one is  the business growth of that particular company which in many case depends on the over all growth of economy and the other is the over all mood of investors in stock market.In a market/economy situation like the current one  many prophets are appearing in business channels and predicting  the index targets as 5000,4000.3000 and so on.Hearing such targets we are not ready  to think whether the stock price of  a specific company already reflecting a major portion of negatives or not and take action accordingly.On the other side ,while buying stocks in such dooms day we should not  expect return from next day onwards but take it as an opportunity to grab quality names at throw away prices for creating wealth in long term.Buying in small lots  at various levels will help to get stocks  at a reasonable average in such volatile times.The main point to remember in a situation like this is – never invest using leveraged and time bounded funds and never expect return from the very next day onwards.

                                                                         Many good auto ancillary companies are now trading around their life time low prices which offer good opportunity for long term investors. Lumax Auto Technologies ( LAT) is one such company  which supplying two wheeler chassis, Adjustor Motors  ,Exhaust systems & Mufflers, Fork & Handle Bar Assemblies, Petrol tanks, , Auto lightings ..etc to two and three wheelers.Company is a major supplier to Honda Motors,Bajaj Auto,Piaggio,Tata Group ..etc from its 6 plants located across India. Even if there is slowing demand in auto industry in general,two wheeler companies are not much affected and Honda Motors – major customer of  LAT – reporting good growth.Company’s financial performance is stable even in this tough times which reported a consolidated top line of Rs.766 Cr , net profit of Rs.41 Cr and an EPS of Rs.30. in FY 2012-13.Stock is currently available at Rs.92 with a P/E multiple of  just 3 .Company is consistently paying decent dividend ,paid 60 % each in last three years. It is a good opportunity for those having enough patience .Stock is listed both in NSE and BSE and trading @ Rs.92.


Link to Company website HERE

23 comments :

  1. What about Motherson Sumi Systems ?

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  2. Not bad ,but can we say it cheaply valued at CMP ?

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  3. Hi Sir..
    Can i add some of Relcap ..

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  4. I think they are major suppliers for Bajaj Discover line as well. Which Rahul Bajaj announced that they are going to launch 6-7 variants in coming 3-6 months. So yeah the stock looks attractive but are there are concerns from long term investors that were invested in it? If you see it has consistently gone down from 150 levels. Also there was some corporate governance issue related to one of the director of the company which they have corrected but nevertheless a company to keep an eye on

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  5. Sir,
    Kindly give your views on Arvind Remedies.

    ReplyDelete
    Replies
    1. Major portion of company's business is supply against government tenders.I have not much idea about the promoter back groud too .Seems bit operator play in this one ,so anything is possible in Arvind Remedies.

      Delete
  6. Dear sir,

    Your views on Granules, Britannia, though you had recommended several times, one last time, can we enter now... & your thoughts on Va tech wabag& astra micro processor at current cmp.

    ReplyDelete
    Replies
    1. No change in previous views on this cos.

      Delete
  7. Sir,

    Request your views on Noida Toll Bridge. Has taken a beating and looks good at CMP.

    Thanks,
    Anand

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  8. Dear sir, do you see any hopes in 'Nilkamal'??

    Thanks,
    Shilpa

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    Replies
    1. Current valuation is attractive but ,Company's major raw material is crude based ,so keep an eye on that factor.

      Delete
  9. is it a good time to enter Seamec company's Market capitalization @ 152 crore and cash & bank @ 100 crore ....awaiting for your valuable suggestion

    SHAHEER THRISSUR

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    Replies
    1. Expecting range bound movement in SEAMEC

      Delete
  10. Whats your present view on WOCKHART & LUPIN?

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    Replies
    1. Even if there is some quality related issues for Wockhardt .I am positive on this stock for long term .It is one of the large size pharma company available at very attractive valuation.But considering the pending decision of USFDA in the case of some other plants ,some risk is also there.Management seems taking the issues very seriously and implementing various changes at different levels to sort out this problem.I believe company will come out of these issues earlier than the market expectation.At present it is suitable only for brave hearts.


      Positive on Lupin

      Delete
  11. sir i want ur view on sel manufacturers and wockhardt pls . advice

    ReplyDelete
    Replies
    1. Negative on SEL Manufat.

      For Wockhardt ,see above reply.

      Delete
  12. thx for ur valuable words on sel mnfg n wockhardt. say some words on suzlon energy.

    ReplyDelete
  13. Sir, need your help on First Leasing, I hold the stock. Should I sell immediately at a loss?

    http://www.livemint.com/Industry/r231MJa5WVQT98uMvMgVyK/RBI-bars-First-Leasing-from-undertaking-business.html?ref=dd


    And this is the link for the sections of RBI:
    http://www.rbi.org.in/scripts/NotificationUser.aspx?Id=8028&Mode=0

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  14. How is hind rectifiers for long term

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  15. Sir ur views on lumax auto technologies

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