Axle is part used for transmission assembly of an automobile. The prime purpose of axle is to bear the vehicle weight. It is also crucial for maintaining the position of the wheels.

It also manufactures solid and hollow spindles used in assembling the axle for various vehicles and equipment.

Its products are widely used world over by the leading OEM manufacturers across USA, Sweden, Turkey, Brazil, Italy, Germany, Spain, Mexico, Japan, UK, France, China and Australia, among others.

Besides, the company is also tier 1 suppliers to several Indian OEMs.

Marquee list of clients

GNA has built strong customer relationship across its diverse client base in India and abroad.

The company has been supplying components to OEMs in 13 countries across five continents.

It also caters as the tier 1 supplier to several Indian Automotive companies. Besides, it has also partnered many of its key customers in the product development process. This has allowed the company to meet the desired specifications and entire repeat business.

Its customers primarily include original equipment manufacturers (OEM) such as Mahindra & Mahindra Limited, John Deere, Tractors and Farm Equipment and tier-1 suppliers to OEMs such as Automotive Axles, Meritor HVS AB and Dana. GNA's major global customers include Meritor HVS AB, John Deere, Transaxle Manufacturing of America, Dana and Kubota Corporation among others.

It supplies to countries like USA, Brazil, Sweden, Japan, Germany, France, Australia, Mexico, Spain, Italy, Turkey, UK, China, and India.

September 2017 quarter results

In September 2017 quarter sales grew 18% to Rs 153.54 crore. OPM fell 120 bps to 15.5%. Thus OP rose 10% to Rs 23.74 crore. Other income stood at Rs 88 lakh vis a vis 1 lakh last year. PBIDT thus rose 14% to Rs 24.61 crore. After 16% rise in depreciation cost at Rs 6.46 crore and 58% drop in interest expense to Rs 1.81 crore, PBT rose 40% to Rs 16.34 crore. After 36% rise in tax provision to Rs 5.68 crore, net profit stood at Rs 10.66 crore, a rise of 42%

Six months results

For the six months sales grew 11% to Rs 298.61 crore. OPM fell 80 bps to 15.6%. Thus OP rose 6% to Rs 46.67 crore. Other income stood at Rs 1.79 crore vis a vis 1 lakh. PBIDT thus rose 10% to Rs 48.45 crore. After 3% rise in depreciation cost at Rs 12.35 crore and 52% drop in interest expense to Rs 3.90 crore, PBT rose 35% to Rs 32.20 crore. After 23% rise in tax provision to Rs 10.45 crore, net profit stood at Rs 21.75 crore, a rise of 42%

Both exports and domestic sales to grow at decent pace

The management expects the domestic rear axle shaft market to grow at 13% CAGR over the next five years.

By the year 2024, the global rear axle market is forecasted to reach USD 57.77 Billion. An increase in the concern over safety and security is estimated to drive demand over the projected period.

New opportunities are expected to open up for export-oriented, low cost, countries such as India. Under such circumstances, the management believes that its leadership position gives it the platform to benefit from this growth both domestically and globally.

Current year is expected to see both exports and domestic sales grow at decent pace.

Valuation

The scrip trades at Rs 373.