Atul Auto, which is Kedia’s largest single equity bet in terms of the holding value, has been on a downturn since hitting the 52-week high of Rs 755 on the BSE. On Friday, this smallcap counter with a market capitalisation of Rs 1,270.31 on the NSE, closed at Rs 457.75. This is a 39% drop from its peak.
Kedia held over 58 lakh shares representing 20.91% stake in Atul Auto in his name and through Kedia Securities Private Limited. The current holding value of Atul Auto is worth Rs 265 crore.
This stake has not changed since the September quarter of 2023, according to the data fetched from Ace Equities.
The Rs 71 crore figure is the decline in the value of shares this year, and does not indicate a loss for the ace investor.
The stock could be in focus ahead of its Q1 results announcements due on August 7.”Atul Auto is a reputed manufacturer and seller of auto rickshaws in both domestic and international markets. Currently, it is one of the fastest-growing three-wheeler companies in India,” V.L.A. Ambala, a Sebi-registered Research Analyst and Co-founder of Stock Market Today said.Decoding the technical charts, she said that the stock is trading near its 200-week and 20-month moving averages, which suggests there could be an opportunity for gradual buying over the next 7 to 15 days. “Those interested may consider entering positions in the buying range of Rs 410 to Rs 460 and set price targets between Rs 530 and Rs 800. However, I suggest they adhere to a stop-loss at Rs 390 to manage risk effectively,” Ambala suggested.
Fundamentally, the current valuation of Atul Auto remains stretched, she opined, suggesting that its P/E ratio stands at 57.91 and much higher than the sector PE of 19.93. Meanwhile, its P/B ratio is 2.84 while ROE (Return on Equity) is quite low at 2.02%.
Anuj Gupta, Director at Ya Wealth Global Research said that the stock has been trading in a range over the last couple of months and expects the trend to continue, going ahead. He sees strong support at Rs 440 and resistance at Rs 480.
The company reported a strong January-March quarter, posting a 34% year-on-year jump in its consolidated net profit at Rs 7 crore. The total revenue in the said quarter stood at Rs 212 crore, growing 31% YoY.
Kedia has invested in 14 stocks and his other bets with significant holding value include Neuland Laboratories (Rs 179 crore), TAC Infosec (Rs 136 crore), Elecon Engineering (Rs 130 crore) and Sudarshan Chemical (Rs 125 crore).
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)