Munjal Auto

The consistency of growth in sales and profit numbers of Munjal Auto is truly remarkable. The sales / sales growth over LY and profit / profit growth over LY is listed below -
2002 : Sales - 105.63 crs (49.4%); Profit - 11.97 crs (148.0%)
2003 : Sales - 126.61 crs (19.8%); Profit - 13.15 crs (9.80%)
2004: Sales - 159.13 crs (25.68%); Profit - 19.68 crs (49.6%)
2005: Sales - 246.10 crs (54.65%); Profit - 25.98 crs (32.01%)

I estimate the FY2006 numbers on the sales and profit front to close at -
2006: Sales - 375.00 crs (52.37%); Profit - 34.00 crs (30.86%)

Some other important stats about the company -

a) The fwdPE of the scrip is 14.49, which though is not the lowest in it league .. is however among the better one. (I ran a massive filter on some 250+ auto ancillary companies for a minimum of 100 crs sales, profits of atleast 20 crs a year, qtr profits of atleast 6 crs ..... Munjal Auto came a #4 after Pricol, Subros and Amtek India ... I have put the entire list in the comments section)

b) At a dividend of rupees 4.00 for a 10 rupee share, the yield comes to only 1.63%. However, it is estimated that the payout for this yr would gross closer to 5.50 rupees.

c) The NCAV of the scrip is negative 11.52 due to the use of debt, which I feel is never a bad strategy as long as there is enough money to service the debt.

Although Munjal Auto's future is closely linked to that of it's more illustrious customer, Hero Honda Motors Ltd. and to the motorcycle industry per-se - I find the future of the company in good hands. At rupees 245.00, the stock may be a bit higher than the price I might want it at but I am comfortable in looking at a small investment and jacking up if the price diminishes in the short run.