RATING

RECOMMENDATION

Sell

  • ROFR Required
  • Available in Depository:

  • NSDL

  • CDSL

  • Available for Investment:

  • Primary

  • Secondary

RATING

RECOMMENDATION

Sell

Business Type

Traditional Business

RATING

RECOMMENDATION

Sell

Business Type

Traditional Business

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

265.31

P/B

4.87

Market Capitalisation

₹662.76 Cr

Enterprise Value

₹707.86 Cr

Book Value

₹53.43

Intrinsic Value

₹172.69

Earnings Yield

0.38 %

Sector

Materials

Sub-sector

Auto Parts

Category

Micro Cap

Cashflow - Operations

-₹32.75 Cr

Cashflow - Financing

₹25.11 Cr

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:

ParticularsAmount (in Rs. crores)
Freehold Land

0.15

Freehold Buildings10.18
Furniture and Fittings0.55
Plant and Machinery48.61
Computers0.28
Vehicles0.07
Intangible Assets3.93
Other Non Current Assets0.50
Inventories92.37


  • 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 AxleMaximum Safe Axle Weight

Single Axle with single tyre

3.0 tonnes
Single Axle with two tyres7.5 tonnes
Single Axle with four tyres11.5 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 trailers21 tonnes
Tandem axle for Puller tractors for hydraulic and pneumatic trailers28.5 tonnes
Tri Axles (Three Axles) (where the distance between outer axles is less than 3 meters)
Tri Axle for rigid vehicles, trailers and semi-trailers27 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.
Axles India Rating

  • RECOMMENDATION

    Sell

  • Axles India Detail Info

Industry Statistics

PUBLIC LIMITED

Registered In

India

last Updated

10/06/2022

Registered Date

18/02/1981

Planify Ticker

AIL

Reg Office: 21, Patullos Road, Chennai, Tamil Nadu, 600002

Visit Website

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This new SEBI rule was introduced in the month of August-2021, wherein the SEBI has reduced the lock-in period previously from 1 year to 6 months to encourage more and more funds to be invested in startups which are going to public or IPO in near future. Reduction of lock-in is seen as big step and after that many PMS funds are advising their clients to invest in Pre-IPO shares to get the benefit of early stage investment.

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