Undervalued Auto Ancillary:

*Gujarat Automotive Gears*

Baroda based GAGL was set up in 1973 for mfg auto and Tractor components:

Transmission Gears
Transmission Pins
Propeller shaft
Axle Shaft
Wheel spanners etc

Company supplies same to OEM as well as replacement market under KAG brand. GAGL exports to countries like Germany, Italy, Egypt, UK etc

Financial Performance:

              9mFY17. 9mFY16

Sales      26.          18

Interest. 0.87.       0.86

PBT.         6.27.     4.53

PAT.         4.18.      2.98

Equity.      0.35

GAGL has reported fabulous nos for 9 months _which are equivalent to nos reported for entire FY16_

It's topline rose to 26crores vs 18 crores and PAT rose to 4.18 cr vs 2.98cr. *EPS for 9 months is 23.90* Profit margins of GAGL must be highest in the industry

             FY17e.  FY18e

Sales.   34.       40

PAT.      5.60.   6.50

*EPS.     32     37.15*

GAGL is trading at

10xFY17Eeps

8.60xFY18Eeps

When majority of auto Ancillary Stocks having PERatio of 20-35, GAGL is grossly undervalued

On tiny equity of 35 lacs , Reserves will rise to 31 crores on 31st March 2017.

_GAGL is Bonus candidate_

*TP Rs 650 in 12 months*