Buses are the lifeblood of urban transport, connecting people to work, school, and daily life. They reduce traffic congestion and pollution, making cities more livable. Many companies rely on bus and auto components to keep these vital vehicles running smoothly. From engines to brakes, each part plays a crucial role in safety and efficiency.

In this auto component sector, one of the Tata Group stocks is a major player, i.e., Automobile Corporation of Goa Limited. The company’s stock has surged for many days because revenue has grown at a CAGR of 71.39%.

In this article, let us understand the reason behind the revenue growth and financial, segments, future plans, and key financial metrics of the Automobile Corporation of Goa Limited.

Industry Overview

India’s rapid economic growth in recent years, which has led to rising incomes and increased infrastructure spending, has driven the automobile industry to new heights. India is grabbing the opportunity to become a hub for auto component sourcing. India is planning to significantly reduce imports, although it exports over 25% of its auto component production annually.

By FY26, exports are projected to hit US$30 billion. The industry aims to invest Rs. 58,000 crore (US$ 7 billion) in adopting advanced components like electric motors and automatic transmissions in FY28. The Indian auto industry is expected to be worth US$200 billion in FY26.

Company Overview Of Automobile Corporation of Goa

Automobile Corporation of Goa Limited was founded on September 1, 1980. The company is the first major engineering unit to be set up in Goa and was jointly promoted with Tata Motors Ltd. and the Economic Development Corporation of Goa (EDC Ltd.).

It manufactures sheet metal components, assemblies, and bus coaches. The company enters into a technical collaboration with Fuji Heavy Industries Ltd., Japan. It also had an agreement with FHI Limited to build monocoque buses in 1995.

The company’s vision is to provide contemporary bus bodies and automotive components for diverse user applications within and outside the country. Automobile Corporation of Goa Limited is a supplier of pressings and assemblies to Tata Motor’s Pune factory. The company has 5 manufacturing plants located in Goa, Pune, and Karnataka

Segments Analysis Automobile Corporation of Goa

Automobile Corporation of Goa Limited has diversified its segments into mainly two categories, which are the bus body building segment and the pressing segment. The company has sold a total of 90477 buses till now, out of which 6511 buses were sold in FY24.

It also entered into the new business module of bus body manufacturing for electric buses. The company can develop new modules for school bus segments and staff bus segments.

In bus body building segments, it engaged in the manufacturing of bus bodies and their parts. The company has increased the sale of buses from 5715 buses in FY23 to 6511 buses in FY24, a gain of 796 buses as compared to the previous financial year.

Out of the 2347 buses exported, the number of buses increased by 63% in FY24. The revenue of the company also increased from ₹436.55 crore to ₹511.15 crore, which is a growth of 17.09%. 

The pressing division segment is committed to the manufacturing of pressed parts, components, sub-assemblies, and assemblies. The sheet metal division has an output of more than 17,620 tons in three pressing units.

The revenue of the company in this segment has increased from ₹67.82 crore in FY23 to reach ₹73.06 crore in FY24. The revenue is because of the increased demand for components due to a recovery in the demand for commercial vehicles.

Stock Movements after the Quarterly Reports

Automobile Corporation of Goa Limited has announced the quarterly reports for July 30, 2024. The company has increased its revenue from ₹169 crore in Q4 FY24 to ₹203 crore in Q1 FY25, which has grown by 20.12%. The net profit also rose from ₹11 crore to ₹18 crore as compared to the previous quarter. The OPM margin improved to 10% from 6% in Q1 FY25. 

As a result, the stock has moved significantly. The remarkable result was that the Automobile Corporation of Goa Limited’s stock price started surging from ₹2384.20 to reach a new all-time high of ₹3449 on August 2, 2024. It has surged by 44.66% in 3 market days only. In the next parts of this article, we will dive into the company’s financials.

Financial Analysis Of Automobile Corporation of Goa

In the financial analysis of Automobile Corporation of Goa Limited, the revenue has risen from ₹506.21 crore in FY23 to ₹584.34 crore in FY24, which has grown by 15.43%. Automobile Corporation of Goa Limited’s revenue primarily comes from the bus body building segments as compared to the pressing segments. It has grown sharply as compared to last year, mainly due to an increase in demand for the commercial vehicle passenger segment.

Automobile Corporation of Goa Limited’s revenue has risen over the last four financial years. The company increased sales of bus units massively, from 987 units in FY21 to 6511 units in FY24. It has increased by 796 bus units as compared to FY23. The company’s revenue growth has had a compound annual growth rate (CAGR) of 71.39% for the last three years.

Automobile Corporation of Goa Limited’s net profit has grown over the last 3 years. The company has improved its net loss of ₹12.51 crores to convert into a net profit of ₹3.44 crores in FY22. At present, the net profit has grown by 37.77%, which is from ₹27.85 crore in FY23 to ₹38.27 crore in FY24. The company’s net profit growth has had a CAGR of 255.90% for the last two years. 

Automobile Corporation of Goa Limited’s operating profit margin has improved from 6.76% in FY23 to 8.75% in FY24. The net profit margin has risen from 5.50% to 16.56% in FY24. The company has improved from a negative margin to maintaining a good positive margin because of its increasing revenue. In FY24, the company’s ROE and ROCE were 17.52% and 22.04%, respectively. Automobile Corporation of Goa Limited is an almost debt-free company that has reduced its debt-to-equity ratio from 0.37X to 0.28X in FY24.

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Future plans Of the Automobile Corporation of Goa

• ACGL is focusing on expanding the electric bus segment to meet the growing demand for eco-friendly transportation solutions, supported by advancements in battery technology and government policies.
• The company is investing in manufacturing facilities to produce new bus models and using modern design methodologies to benchmark its products against competitors​.
• The company is developing new bus models in the school and staff segments. This diversification aims to cater to a broader market base.
• The company increased capital expenditure on ongoing projects to ₹65.65 lakhs in FY24 from ₹45 lakhs in FY23.
• The company is planning to implement CSR efforts, focusing on educational programs, healthcare initiatives, skill development workshops, and infrastructure improvements.
• ACGL is expanding its international footprint in the bus market, aiming to establish a trusted global brand. This expansion aligns with the company’s vision of creating a sustainable and impactful presence worldwide.
• The company is exploring strategic partnerships to leverage technological advancements and enhance its product offerings in the electric vehicle space
• company is focusing on product up-gradation by enhancing design capability using 3D design methodology to improve products compared to competitors.

Shareholding Pattern of the Automobile Corporation of Goa

Automobile Corporation of Goa Limited has a major holding of Tata Motors Limited (48.98%), Tata Motors Finance Limited (0.79%), financial institution investors (0.01%), and public holdings (50.22%) as of June 2024. We can see the shareholding pattern below the bar diagram.

Financial Metrics Of the Automobile Corporation of Goa

Some of the key financial metrics of Automobile Corporation of Goa Limited are as follows

Conclusion

We are at the end parts of the article, the Automobile Corporation of Goa Limited, as a Tata Group company, shows impressive revenue growth. Tata Motors holds a significant stake in the company. The firm’s focus on electric buses and new segments promises continued future expansion.

With improving profit margins and a nearly debt-free status, the Automobile Corporation of Goa is well-positioned for continued success in India’s thriving auto industry. What do you think about the Automobile Corporation of Goa Limited? Let us know in the comments below.

Written By Nikhil Naik

By utilizing the stock screener, stock heatmap, portfolio backtesting, and stock compare tool on the Trade Brains portal, investors gain access to comprehensive tools that enable them to identify the best stocks, also get updated with stock market news, and make well-informed investments.

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