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Axles India Essentials

Discover and get a complete analyzed report on Axles India Limited (AIL) - Management, Business Model, Financials, Growth, Valuations, Funding Rounds, News and get the latest updates on Axles India Upcoming IPO & unlisted shares.

ISIN

INE701C01011

Face Value

₹10.00

Total Share

2,54,90,646

Total Income

₹312.02 Cr

Profit After Tax

₹2.96 Cr

EPS

₹0.98

P/E

269.39

P/B

4.94

Market Capitalisation

₹672.95 Cr

Enterprise Value

₹718.05 Cr

Book Value

₹53.43

Intrinsic Value

₹172.69

Earnings Yield

0.37 %

Sector

Materials

Sub-sector

Auto Parts

Axles India Growth

Compounded Sales Growth

-24.39%

1 Year
-10.32%

5 Year
-6.32%

9 Year

Pro Only

Compounded Profit Growth

-75.67%

1 Year
-25.03%

5 Year
-25.05%

9 Year

Pro Only

Return On Equity

2.17%

2021
17.07%

2017
2.87%

2013

Pro Only

About Axles India

Axles India Limited ("Axles India") manufactures and supplies pressed axle housings for a range of medium and heavy commercial vehicles. The company offers rear, tag, drive, and hub reduction axle housings; and trailer axle beams. It serves OEMs in India. The company also exports its products.
The company has the capacity to provide axles housings for entire range of medium and heavy commercial vehicles. The production of pressed axles housings is at an annual level of 2,80,000 pressed axle housings, manufactured in plants of Sriperumbudur and Cheyyar.
The company commenced production at its Sriperumbudur plant, with an annual volume of 10,000 axle housings to Ashok Leyland. The company set up an additional facility at Cheyyar in 1995 to meet increased demand for domestic OEMs. In 2003, facility to manufacture drive head assemblies was installed. In 2006, export oriented unit was established for catering to export markets. In 2011, drive head business was sold to Dana India Pvt. Ltd.
Axles India Ltd. was incorporated on 18th February 1982, as a joint venture with Eaton,based in Chennai, Tamil Nadu.. In 1998, Dana Holding Corporation purchased Eaton Axles Business and Axles India's shares were part of the arrangement. The company operates as a joint venture of Wheels India, Sundaram Finance and Dana Holding Corporation, USA.
The company supplies to Tata Motors, Ashok Leyland, VE Commercial Vehicles, Dana India Pvt. Ltd., SML Isuzu, Mahindra trucks and buses and Daimler India Commercial Vehicles. The company also exports to Dana, USA and Volvo Trucks USA.

Axles India Merger & Acquisition

Acquisition

On June 30, 2011, Dana Holding Corporation completed the acquisition of axle drive head and final axle-assembly operations from Axles India Ltd. for INR 577.85 million.

Axles India Subsidiaries

Dana Automotive Systems Group LLC
Dana Commercial Vehicle Manufacturing LLC
Dana Commercial Vehicle Production LLC
Dana Heavy Vehicle Systems Group

Axles India Business Model

Dana Automotive Systems Group LLC : Manufacturer of motor vehicle parts.
Dana Commercial Vehicle Manufacturing LLC : Manufacturer of commercial vehicle parts.
Dana Commercial Vehicle Production LLC : Manufacturer of commercial vehicle parts.
Dana Heavy Vehicle Systems Group : Manufacturer of heavy motor vehicle parts.

Axles India Revenue Segmentation

Sale of Services
Other Operating Revenue

Sale of Axle housing products

Axles India Product & Services

Products of the company are:

Rear Axle Housing
Tag Axle Housing
Rear Axle Housing - Exports

Axles India Assets

Total Assets as on 31st March, 2021:

Particulars	Amount (in Rs. crores)
Freehold Land	0.15
Freehold Buildings	10.18
Furniture and Fittings	0.55
Plant and Machinery	48.61
Computers	0.28
Vehicles	0.07
Intangible Assets	3.93
Other Non Current Assets	0.50
Inventories	92.37

Axles India Industry Overview

Industry Statistics

An axle assembly on a car or truck is the set of components that allow the wheels to rotate freely. Two wheels are usually connected by a shaft known as an axle, it sits inside an axle housing, and is held in place by bearings and bushings that allow it to rotate within the axle housing. The axle housing products are used in the manufacturing of passenger vehicles, commercial vehicles, and others.
In 2021, axle housing sales reduced by 2.4% to Rs. 7.4 mn from Rs. 7.6 mn in 2020. The decline is primarily attributable to the industrial activity negatively impacted by covid 19 pandemic. However, with the economy picking up, demand for bulk carriers for petroleum products, cement, steel, etc. and with the automobile sector also growing, the axle housing market is expected to grow further.
The industry is primarily segmented into 3 categories on the basis of type i.e. front axle, rear axle, tag axle, and stub axles.
Rear axle housing products are major components of the automotive industry and enhance the vehicle's fuel economy. It provides ease of handling and safety by reducing the overall weight of the car. Rear-axle housing market is forecasted to reach $49.3 bn by 2027, registering a CAGR of 5% during 2021-2027.
Tag axles are the third axles added to heavier recreational vehicles. It helps in carrying more weight. It is used in cranes and trucks.
Growth Drivers: The key driver of the axel market growth is the increasing demand for heavy-duty commercial vehicles and passenger vehicles. As per Care Edge , the production of commercial vehicles has increased to 0.81 million units in 2022 as compared to 0.62 million units which represents a growth of 30.6% year-on-year. According to Research and Markets, the commercial vehicle market in India is further expected to grow at 3% from 2018 to 2030, with trucks expected to grow at 2.8% CAGR and buses expected to grow at 4.4% CAGR. The domestic sales of commercial and passenger vehicles in India have declined in recent years owing to the economic slowdown in FY20 and the Covid-19 pandemic in FY21. However, the sales improved by 26% and 13% in FY22 with the government’s continued focus on improving infrastructure and construction activities.
Competitive Landscape: Some of the key competitors include Takshi Auto Components Pvt. Ltd., Aar Ess Auto Pvt. Ltd., GNA Axles Ltd., Talbros Engineering Ltd., Dana India Pvt. Ltd., Highway Trading Pvt. Ltd. and Western Abrasive Industries.

Future Prospects

The rise in inclination for SUVs and upsurge in production of other passenger cars favors the axle housing market.
With the advent of electric axle drive, the manufacturers offer minimum power losses, which otherwise could be caused by mechanical actions.
High spending power of the customers and standardized lifestyle positively impacts the demand of the axle housing market.

Government Initiatives

On 18th July, 2018, Union Ministry of Road Transport and Highways issued a notification increasing permissible truck axle load. As per amended rules, the maximum safe axle weight for each axle type in relation to the transport vehicles (other than motor cabs) with regard to the size, nature and number of tyres are as follows:

Single Axle	Maximum Safe Axle Weight
Single Axle with single tyre	3.0 tonnes
Single Axle with two tyres	7.5 tonnes
Single Axle with four tyres	11.5 tonnes
Tandem Axles (Two Axles) (where the distance between two axles is less than 1.8 meters)
Tandem axle for rigid vehicles, trailers and semi trailers	21 tonnes
Tandem axle for Puller tractors for hydraulic and pneumatic trailers	28.5 tonnes
Tri Axles (Three Axles) (where the distance between outer axles is less than 3 meters)
Tri Axle for rigid vehicles, trailers and semi-trailers	27 tonnes
Axle Row (two axles with four tyres each) in Modular Hydraulic trailers (9 tonnes load shall be permissible for single axle)	18 tonnes

Axles India Strengths

Low bargaining power of suppliers: The company has diversified its suppliers portfolio by building a robust supply chain across various countries.
Technology Absorption: The company continues to innovate and increase its technology deployment to meet the requirements of its consumers in various industry segments.
Conservation of Energy: The company is implementing energy conservation activities in all its plant locations. Some examples include use of variable speed driver for motor, replacement of inefficient motor with energy efficient motor, optimization of motor capacity, use of energy efficient pump and power factor improvement to reduce energy billing in its plants.

Axles India Shortcomings

High bargaining power of channel partners in auto and truck parts industry: Due to regulatory requirements in India, the company has not been able to streamline the operations to reduce bargaining power of the value chain partners.

Axles India Opportunities

Increase in government spending: As various governments are increasing social spending and infrastructure spending to build economies post covid 19, the company can use opportunities from government spending in auto and truck parts sector.
Change in consumer behavior post covid 19: Consumer behavior has changed in the auto and truck parts industry because of covid 19 restrictions. For example - consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. The company can further use this consumer data to build better consumer loyalty, provide better products, service collection and improve the value proposition in inflationary times.

Axles India Threats

Foreign currency risk: The company's activities expose it to foreign exchange risk arising from foreign currency transactions in US dollars.
Stagnating economy with rate increase: The company can face lack of demand in the market place because of central bank's actions to reduce inflation. This leads to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in auto and truck parts industry.
Environmental challenges: The company needs to have robust strategy against the disruptions arising from climate change and energy requirements.