Force Motors shares hit 5% upper circuit as net profit grows 395% in Q2

Force Motors, the Abhay Firodia group's flagship company, saw its shares hit the 5% upper circuit limit of ₹4,053.25 apiece during early trade deals on Friday. This impressive gain came after investors responded positively to the company's Q2FY24 numbers released after market hours on Thursday.

For the July-September quarter of FY24, the company reported a net profit of ₹94 crore, which displays a strong improvement from a net profit of ₹19 crore reported in the same period of last year, which is an increase of 395% YoY.

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The consolidated revenue from operations grew by 42.40% YoY to ₹1,800 crore in Q2 FY24. The company witnessed an improvement in its operating profit, reaching ₹221 crore in Q2 from ₹98 crore in Q2 FY23, while the EBITDA margin expanded by 400 basis points YoY to 12%.

Further, the company's EPS (earnings per share) during the quarter improved to ₹71.24 from ₹14.61 in Q2 FY23. At the prevailing price, the stock trades at a price-to-earnings multiple of 17.33x, which is much lower compared to the industry P/E of 33.78x.

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Force Motors is a fully vertically integrated automobile company with expertise in the design, development, and manufacture of the full spectrum of automotive components, aggregates, and vehicles.

Its range of products includes light commercial vehicles (LCVs), multi-utility vehicles (MUVs), small commercial vehicles (SCVs), sports utility vehicles (SUVs), and agricultural tractors.

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The company's shares have been on an upward journey since March and have gained 273% to date. Over the past three years, it has been up by 278%, and in the last five-year period, it has gained nearly 112%.

The promoters own 61.6% of the shares in the company as of Q2FY24, while foreign portfolio investors and domestic institutional investors own 4.9% and 1.6%, respectively. Regular shareholders own 31.9%, Trendlyne data showed.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.