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Munjal Auto – Multibagger Analysis

Munjal Auto – Multibagger Analysis

Munjal Auto Industries Ltd., (MAIL) is a TS 16949 and ISO 14001 accredited, leading auto component manufacturing company in India producing Exhaust systems complete for two wheelers and four wheelers, Spoke rims for two wheelers, Steel Wheel Rims for Two Wheelers and Four Wheelers, Fuel Tanks for Four wheelers, Seat Frames for four wheelers and other automotive assemblies. The company has a technical collaboration with Samsung Industries Ltd. of Korea for the manufacture of Fuel Tanks for Four Wheelers. The company holds the pride of being among the largest manufacturer of the exhaust systems in the world, manufacturing close to 22,000 systems per day. Besides the company produces more than 10,000 spoke rims for motorcycles and steel wheel rims every day.

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Company URL: http://www.munjalauto.com/

Screener URL: http://www.screener.in/company/520059

CMP: 81

Warren Buffett Checklist

History of Consistently Increasing Sales, Earnings & Cash FlowYes.image
Durable Competitive Advantage Yes.image
Future Growth DriversYes for next 2 years.image
Conservative Debt (long term debt < 3 Net Profit)Yes.image
Debt Equity Ratio0.34image
Return on Equity must be Above Average28%image
Low CAPEX required to maintain current operationsModerate.image
Management is holding / buying the stockFlat for 3 years at 75%image
Price is Under Valued (< intrinsic value)Yesimage
Stock Price is consolidating (now)Price at yearly peakimage
Stock Price is growing in past years along with EPS growthYes. image

 

Additional Futurecaps Checklist

Consolidated PE, PB RatioPE 8 (good), PB 2 (good)image
Cash Flow Positive, Net Profit % greater than 8%Positive Cash Flow, But Net Profit around 5% only.image
Paying Dividends, TaxYesimage
EPS Growth Rate20% (good) image
Latest Quarter EPS GrowthFlat. Be alert. image
Expected Gain in 5 YearsConsidering moderate EPS growth of 15-20% the company should grow 8-10 times in 5 years. image
Volume AnalysisModerate image
Power of BrandYes.  Part of Hero Group of companies. image
Corporate Governance, Reputation of LeadersYes. image
Fraud reportedNot in current search. image

Declaration

Considering the above qualities Munjal Auto is a stock with moderate multibagger properties.  I do expect good motor business for next 2 years before recession strikes.

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Allocation

2-3% of your portfolio.

Disclaimer

Futurecaps recommends 20 to 25 multibaggers per year, we recommend a 25% to 50% allocation of your savings in equity.  The stocks recommended here are gone through Analysts of several years experience in stock market.  Although they were successful in predicting future multibaggers, the overall stock market is a risky game.  So we recommend the reader to put his/her own thoughts & invest wisely.

About Futurecaps

Futurecaps is a 12+ year experienced Indian Stock Market Advisory with SEBI Registration.

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5 Replies to “Munjal Auto – Multibagger Analysis”

  1. I hold this stock for last 4 months. Its testing my patience.

    Inspite of great fundamentals , this is range bound stock between 70Rs to 85Rs.

    But your post confirms my choice hence I will hold it for long term.
    Thanks

  2. Great pick as usual. What is your opinion on Indian Toners & Developers. Seems like a good business in a decent growth industry at very cheap valuations. At P/E of 4 and clocking growth rates of 10 – 20% YoY.

    1. Varun, recently I bought ITDL at 36 and sold at 52. its having good business. Before big players come into this scrip I want to buy it again for long term.

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