Autoline Industries would be my 3rd pick from the auto ancillary space after Steel Strip Wheels and Sona Koyo. Autoline Industries is a major supplier of sheet metal components, assemblies etc. As we know that auto sector has been doing really good lately and will continue to do good atleast for the next 1-2 years, we will see similar kinds of growth in the auto ancillary space as well. There are several small auto ancillary companies available at a very fair valuation for investment purpose. Autoline Industries is one such small auto parts making company that is definitely worth investing into.

Autoline Industries posted an income growth of 78% and net profit growth of 433% in Q1 FY11 (YoY). In Q2 FY11, income growth stood at 74% and net profit growth came at 170% (YoY). The company will continue to post similar kind of growth and so will the stock keep reacting to those numbers. The growth looked too interesting in Q1 FY11 because they didn’t pay any tax and so net profit zoomed. However since they paid the tax in Q2 FY11, the net profit growth was reduced but is still very impressive. We only care about annual figures which suggests that the company might end up close to 30 cr as FY11 net profit on the standalone side. The company has a bigger consolidated numbers which is also posting a decent growth YoY and the good consolidated numbers will only aid in achieving new highs for the stock in future.

Currently the market capital is trading at 300 cr. If we are looking towards achieving a 30 cr earnings mark on the standalone numbers in FY11, we can see an appreciation of 50%+ on this stock from current levels. I’m looking towards a moderate target of 375-400 in the next 6 months.

Buy Autoline Industries with targets of 400.

Related posts:

1. Buy Exide Industries Stock
2. Buy Sona Koyo Stock
3. Buy Reliance Industries